Essay
McGraw Corp. owned all of the voting common stock of both Ritter Co. and Lawler Co. During 2013, 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 2013, Lawler still held 30% of the inventory.
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How should the sale between Lawler and Ritter be accounted for in a consolidation worksheet? Show worksheet entries to support your answer.
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