Problem-
Jones Inc. 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.
Additional information-
The problem belongs to Accounting and it discuss about how a sale should be accounted for in a consolidated worksheet. This has been discussed in the solution detail.
Word limit- 200.