Tara Company Holds 80 Percent of the Common Stock of Stodd

question 100

Essay

Tara Company holds 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 the unrealized gain.

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Definitions:

Cylindrical Features

Characteristics or aspects of a part or assembly that have a circular cross-section and typically extend along an axis, such as shafts, rods, or pins.

LMC

Least Material Condition, a term used in geometric dimensioning and tolerancing indicating the condition of a part when it contains the least amount of material.

Orientation Tolerances

The limits within which the orientation (e.g., parallelism, perpendicularity) of a part feature must lie relative to a specified datum to ensure proper assembly or function.

Perpendicularity

The condition of being exactly at 90 degrees to a given line or surface; a fundamental principle in geometric dimensioning and tolerancing.