Homework Ch 1:Four Problems:Problem 3:Pipe acquires 80% of Slippers on January 1, 2010 and uses the equity method to account for its investment in Slippers. In 2010, Slippers sells land costing $2,000,000 to Pipe for $2,300,000. Pipe still holds the land at the end of 2011.Assume the land is sold to an outside party in 2012 for $3 million.Required: Prepare 2010 and 2012 entries related to this land for Pipe in its internal record.Problem 4:Pipe acquires 80% of Slippers on January 1, 2010 and uses the equity method to account for its investment in Slippers. Assume Pipe sells merchandise costing $1 million to Slippers during 2010. Pipes markup is 50% of cost. Slippers 2010 ending inventory includes $900,000 purchased from Pipe.The $900,000 ending inventory is resold to an outside party in 2011. Slippers markup is 20% of cost.Required: Prepare entries for Pipe in its 2010 internal record for this intra-entity inventory transfer.
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