McGraw Corp

question 75

Essay

McGraw Corp.owned all of the voting common stock of both Ritter Co.and Lawler Co.During 2018, 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 2018, Lawler still held 30% of the inventory.
Required:
How should the sale between Lawler and Ritter be accounted for in a 2018 consolidation worksheet? Show worksheet entries to support your answer.

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Definitions:

Developmental Quotient

A measure used in child development to compare a child's developmental progress in several areas against typical norms.

Gesell Scale

A developmental screening tool used to assess the motor, language, adaptive, and personal-social skills of children.

Stanford-Binet

A cognitive ability assessment test that measures intelligence across five factors: fluid reasoning, knowledge, quantitative reasoning, visual-spatial processing, and working memory.

Emotional Intelligence

The ability to perceive and express emotion accurately and adaptively, to understand emotion and emotional knowledge, to use feelings to facilitate thought, and to manage emotions in oneself and others.