McGraw Corp

question 22

Essay

McGraw Corp. owned all of the voting common stock of both Ritter Co. and Lawler Co. During 2011, 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 2011, Lawler still held 30% of the inventory.
Required:
How should the sale between Lawler and Ritter be accounted for in a consolidation worksheet? Show worksheet entries to support your answer.

---

Definitions:

Strategies

Plans of action designed to achieve a specific goal or overcome obstacles.

Devastating Loss

A situation in which there is significant harm or destruction, often accompanied by intense emotional grief.

Northern Strategy

The plans and tactics employed by the Union (Northern United States) during the Civil War, aimed at defeating the Confederacy and preserving the Union.

Conflict

A serious disagreement or argument, typically a protracted one, often resulting in opposition between parties.