urnal format, prepare consolidation working paper entries at December 31, 2012 to eliminate the effects of the pany inventory sales assuming the perpetual inventory method is used. Answer: Requirement 1 Pirate's Share of Seaways e ($750,000 × 80%) $600,000 Less: Profit in Ending Inventory (15,000) Add: Profit in Beginning Inventory 17,000 Pirate's e from Seaways $602,000 Requirement 2 Debit Credit Sales Revenue 450,000 Cost of Goods Sold 450,000 To eliminate pany sales and cost of goods sold Investment in Seaway 17,000 Cost of Goods Sold 17,000 To recognize previously deferred unrealized profits from the beginning inventory Cost of Goods Sold 15,000 Inventory 15,000 To eliminate pany profit in the ending inventory from cost of goods sold and inventory Objective: LO3, 4 Difficulty: Moderate
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