McGraw Corp

question 75

Essay

McGraw Corp. owned all of the voting common stock of both Ritter Co. and Lawler Co. During 2021, Ritter sold inventory to Lawler. The goods had cost Ritter $65,000, and they were sold to Lawler for $100,000. At the end of 2021, Lawler still held 30% of the inventory.Required:How should the sale between Lawler and Ritter be accounted for in a 2021 consolidation worksheet? Show worksheet entries to support your answer.

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Definitions:

McCarthyism

A period of intense anti-communist suspicion in the United States around the early 1950s, characterized by political repression and accusations of subversion or espionage without proper regard for evidence.

NAACP

The National Association for the Advancement of Colored People, an African-American civil rights organization in the United States founded in 1909 to fight prejudice, lynching, and Jim Crow segregation, and to work for the betterment of "people of color."

Long Telegram

The Long Telegram was a diplomatic message sent in 1946 by George Kennan, an American diplomat in Moscow, to the U.S. Department of State, outlining his views on the Soviet Union and recommending a strategy of containment to combat Soviet expansion during the Cold War.