Parent Subsidiary Sales $1,500,000 $500,000 Cost of Goods Sold 750,000 250,000 Operating Expenses 550,000 150,000 Net Income $200,000 $100,000 Inventory 12/31/X1 $120,000 $60,000 - Parent owns 80% of Subsidiary’s common stocks. - Subsidiary sold $200,000 of goods to Parent. - Of the $200,000 goods, $60,000 were not sold on 12/31/X1. - Parent and Subsidiary have a uniform margin (gross profit rate) on all of its sales. 1/ What amount will be reported as consolidated sales? a. 2,000,000 b. 1,900,000 c. 1,940,000 d. 1,800,000 2/ What amount will be reported as a consolidated cost of goods sold a. 800,000 b. 830,000 c. 1,000,000 d. 770,000
Parent Subsidiary
Sales $1,500,000 $500,000
Cost of Goods Sold 750,000 250,000
Operating Expenses 550,000 150,000
Net Income $200,000 $100,000
Inventory 12/31/X1 $120,000 $60,000
- Parent owns 80% of Subsidiary’s common stocks.
- Subsidiary sold $200,000 of goods to Parent.
- Of the $200,000 goods, $60,000 were not sold on 12/31/X1.
- Parent and Subsidiary have a uniform margin (gross profit rate) on all of its sales.
1/ What amount will be reported as consolidated sales?
a. 800,000
b. 830,000
c. 1,000,000
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
