Question

During 2021, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of the inventory purchase price had been remitted to Pride by Strong at year-end. As of December 31, 2021, 60% of these goods remained in the company's possession. What is the consolidated total for inventory at December 31, 2021

Answer 1

The consolidated total for inventory at December 31, 2021 is $347,200.

Using this formula

Consolidated total for inventory=Book Value Parent's Inventory  + Book Value Subsidiary's Inventory  - Deferred Recognition of Intra-Entity Gross Profit on Inventory Transfer

Let plug in the formula

Consolidated total for inventory=$210,000+$154,000-($28,000 x 60%)

Consolidated total for inventory=$210,000+$154,000-$16,800

Consolidated total for inventory= $347,200

Inconclusion the consolidated total for inventory at December 31, 2021 is $347,200.

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