Tara Company Owns 80 Percent of the Common Stock of Stodd

question 97

Essay

Tara Company owns 80 percent of the common stock of Stodd Inc.In the current year, Tara reports sales of $5,000,000 and cost of goods sold of $3,500,000.For the same period, Stodd has sales of $500,000 and cost of goods sold of $400,000.During the year, Stodd sold merchandise to Tara for $40,000 at a price based on the normal markup.At the end of the year, Tara still possesses 20 percent of this inventory.Prepare the consolidation entry to defer intra-entity gross profit.

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Definitions:

Severe Depression

Severe depression is a mental health disorder characterized by intense and persistent feelings of sadness, hopelessness, and lack of interest or pleasure in activities, significantly impairing daily functioning.

Psychogenic Fugue

An uncommon mental disorder marked by temporary memory loss regarding one's own identity, encompassing recollections, character, and other features that define a person's individuality.

Organic Amnesia

Memory loss caused by physical damage or changes to the brain, which can result from injury, disease, or substance abuse.

Dissociative Identity Disorder

A psychological condition characterized by the presence of two or more distinct personality states that control an individual's behavior at different times.