2.99 See Answer

Question: Akron, Inc., owns all outstanding stock of


Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2021, the companies had the following account balances:



Akron, Inc., owns all outstanding stock of Toledo Corporation. -1

Intra-entity sales of $320,000 occurred during 2020 and again in 2021. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2020, with
$50,000 unsold on December 31, 2021.
a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?
b. Prepare a consolidated income statement for the year ending December 31, 2021.

2.99

See Answer