Choose the correct. Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000 and cost of goods sold of $180,000. During the current year, Top sold merchandise to Bottom for $100,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. Top had established the transfer price based on its normal gross profit rate. What are the consolidated sales and cost of goods sold?a. $1,000,000 and $690,000b. $1,000,000 and $705,000c. $1,000,000 and $740,000d. $970,000 and $696,000

Choose the correct. Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000 and cost of goods sold of $180,000. During the current year, Top sold merchandise to Bottom for $100,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. Top had established the transfer price based on its normal gross profit rate. What are the consolidated sales and cost of goods sold?a. $1,000,000 and $690,000b. $1,000,000 and $705,000c. $1,000,000 and $740,000d. $970,000 and $696,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

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Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
Goddy Company owns 80% of the common stock of Morris, Inc. In the current year, Goddy reports sales of $10,000,000 and cost of goods sold of $7,500,000. For the same period, Morris has sales of $200,000 and cost of goods sold of $160,000. During the year, Goddy sold merchandise to Morris for $60,000 at a price based on the normal markup. At the end of the year, Morris still possesses 30 percent of this inventory. Compute consolidated cost of goods so ld. Select one: a. $7,604,500. b. $7,500,000. c. $7,660,000. d. $7,615,000. e. $7,600,000.
Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000 and cost of goods sold of $180,000. During the current year, Top sold merchandise to Bottom for $100,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. Top had established the transfer price based on its normal gross profit rate. What are the consolidated sales and cost of goods sold?a. $1,000,000 and $690,000b. $1,000,000 and $705,000c. $1,000,000 and $740,000d. $970,000 and $696,000
Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000 and cost of goods sold of $180,000. During the current year, Top sold merchandise to Bottom for $100,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. Top had established the transfer price based on its normal gross profit rate. Assume that the transfers were from Bottom Company to Top Company. What are the consolidated sales and cost of goods sold?a. $1,000,000 and $720,000b. $1,000,000 and $755,000c. $1,000,000 and $696,000d. $970,000 and $712,000
Padlock Corp. owns 90 percent of Safeco, Inc. During the year, Padlock sold 3,000 locking mechanisms to Safeco for $900,000. By the end of the year, Safeco had sold all but 500 of the locking mechanisms to outside parties. Padlock marks up the cost of its locking mechanisms by 60 percent in computing its sales price to affiliated and nonaffiliated customers. How much intra-entity profit remains in Safeco’s inventory at year-end?
KK Co. holds 90% of the common stock of LL Co. During 20x2, KK reported sales of P1,120,000 and cost of goods sold of P840,000. For this same period, LL had sales of P420,000 and cost of goods sold of P252,000. Also during 20x2, KK sold merchandise to LL for P140,000. The subsidiary still possesses 40% of this inventory at the end of 20x2. KK had established the transfer price based on its normal markup. What are consolidated sales?
Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000 and cost of goods sold of $180,000. During the current year, Top sold merchandise to Bottom for $100,000. The subsidiary still possesses 40 percent of this inventory at the current year end. Required: Make the necessary elimination entries Compute consolidated sales and cost of goods sold Bellgrade, Inc., acquired a 60 percent interest in Hansen Company several years ago. During 2011, Hansen sold inventory costing $75,000 to Bellgrade for $100,000. A total of 16 percent of this inventory was not sold to outsiders until 2012. During 2012, Hansen sold inventory costing $96,000 to Bellgrade for $120,000. A total of 35 percent of this inventory was not sold to outsiders until 2013. In 2012, Bellgrade reported cost of goods sold of $380,000 while Hansen reported $210,000.…
TT Company holds 90 percent of BB Company’s common stock. In the current year, TT reports sales of P800,000 and cost of goods sold of P600,000. For this same period, BB has sales of P300,000 and cost of goods sold of P180,000. During the current year, TT sold merchandise to BB for P100,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. TT had established the transfer price based on its normal markup. What are the cost of goods sold?
Planner Corporation owns 60 percent of Schedule Company’s voting shares. During 20X3, Planner produced 29,000 computer desks at a cost of $96 each and sold 14,000 of them to Schedule for $108 each. Schedule sold 9,000 of the desks to unaffiliated companies for $134 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $144 each. Both companies use perpetual inventory systems. Required: What amounts of cost of goods sold did Planner and Schedule record in 20X3? What amount of cost of goods sold must be reported in the consolidated income statement for 20X3? Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X3, relating to the intercorporate sale of inventory.
Sun Corporation, a 75 percent–owned subsidiary of Pam Corporation, sells inventory items to its parent at 125 percent of cost. Inventories of the two affiliates for 2016 are as follows: Pam Sun Beginning inventory $400,000 $250,000 Ending inventory 500,000 200,000 Pam’s beginning and ending inventories include merchandise acquired from Sun of $150,000 and $200,000, respectively, which is sold in the following year. If Sun reports net income of $300,000 for 2016, Pam’s income from Sun will be: $255,000 $217,500 $215,000 $195,000
Sorel is an 80%-owned subsidiary of Pattern Company. The two affiliates had the following separate income statements for 2015 and 2016. (attached)Sorel sells at the same gross profit percentage to all customers. During 2015, Sorel sold goods to Pattern for the first time in the amount of $120,000. $30,000 of these sales remained in Pattern’s ending inventory. During 2016, sales to Pattern by Sorel were $150,000, of which $25,000 sales were still in Pattern’s December 31, 2016, inventory.Prepare consolidated income statements including the distribution of income to the controlling and noncontrolling interests for 2015 and 2016.
GG Co. had the following transactions with two subsidiaries, OO and RR during 2020: Sales of P105,000 to OO, Inc., with P31,500 gross profit, OO had P26,250 of this inventory on hand at year end. Purchases of raw materials totaling P420,000 from RR Corp., a wholly owned subsidiary. RR’s gross profit on the sale was P84,000. GG had P98,000 of this inventory remaining on December 31, 2020. Before eliminating entries, GG had combined current assets of P525,000. What amount should GG report in its December 31, 2020 consolidated financial position for current assets?