Strayten Corp

question 12

Essay

Strayten Corp. is a wholly owned subsidiary of Quint Inc. Quint decided to use the initial value method to account for this investment. During 2011, Strayten sold Quint goods which had cost $48,000. The selling price was $64,000. Quint still had one-eighth of the goods purchased from Strayten on hand at the end of 2011.
Required:
Prepare Consolidation Entry *G, which would have to be recorded at the end of 2011.

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Definitions:

General Journal

The general journal is a comprehensive record of financial transactions over the life of a company, listed in chronological order.

Purchases Journal

An accounting record where all purchases of merchandise, inventory, and other supplies on credit are recorded, excluding cash purchases.

Cash Payments Journal

A journal used in accounting to record all cash outflows or payments made by a company.

Revenue Journal

A specialized accounting journal used to record the sales of services or goods on credit, highlighting the revenue aspect of transactions.