Karlow Corporation owns 60 percent of Draw Company’s voting shares. During 20X3, Karlow produced…

Inventory Transfer between Parent and Subsidiary

Karlow Corporation owns 60 percent of Draw Company’s voting shares. During 20X3, Karlow produced 25,000 computer desks at a cost of $82 each sold 10,000 desks to Draw for $94 each. Draw sold 7,000 of the desks to unaffiliated companies for $130 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $140 each. Both companies use perpetual inventory systems.

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