Tara Company owns 80 percent of the common stock of Stodd Inc.In the current year, Tara reports sales of $5,000,000 and cost of goods sold of $3,500,000.For the same period,

Tara Company owns 80 percent of the common stock of Stodd Inc.In the current year, Tara reports sales of $5,000,000 and cost of goods sold of $3,500,000.For the same period, Stodd has sales of $500,000 and cost of goods sold of $400,000.During the year, Stodd sold merchandise to Tara for $40,000 at a price based on the normal markup.At the end of the year, Tara still possesses 20 percent of this inventory.Prepare the consolidation entry to defer intra-entity gross profit.


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