Corn Corporation purchased inventory from Beef Corporation for P 120,000 on September 20, 2012, and resold 80% of the purchased inventory to unaffiliated companies prior to December 31, 2012, for P140,000. Beef produced the inventory sold to Lorn for P75,000. Lorn owns 70% of Beef's voting common stock. The companies had no other transactions during 2012.

Corn Corporation purchased inventory from Beef Corporation for P 120,000 on September 20, 2012, and resold 80% of the purchased inventory to unaffiliated companies prior to December 31, 2012, for P140,000. Beef produced the inventory sold to Lorn for P75,000. Lorn owns 70% of Beef's voting common stock. The companies had no other transactions during 2012.

Name: What amount of sales will be reported in the 2012 consolidated income
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Description: What amount of sales will be reported in the 2012 consolidated income statement? What amount of cost of goods sold will be reported in the 2012 consolidated income statement? Corn Corporation purchased inventory from Beef Corporation for P 120,000 on

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 34P

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Paggle Corporation owns 80% of Spillway Inc.'s common stock that was purchased at its underlying book value. At the time of purchase, the book value and fair value of Spillway's net assets were equal. The two companies report the following information for 2014 and 2015. During 2014, one company sold inventory to the other company for $50,000 which cost the transferor $40,000. As of the end of 2014, 30% of the inventory was unsold. In 2015, the remaining inventory was resold outside the consolidated entity. 2014 Selected Data:                              Paggle               Spillway Sales Revenue                                  $600,000 $320,000 Cost of Goods Sold                            320,000                 155,000 Other Expenses                                   100,000                 89,000 Net Income                                       $180,000                $76,000 Dividends Paid                                     19,000 0…
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