Planet Corporation acquired 90 percent of Saturn Company's voting shares of stock in 20X1. During 20X4, Planet purchased 40,000 Playday doghouses for $24 each and sold 25,000 of them to Saturn for $30 each. Saturn sold 18,000 of the doghouses to retail establishments prior to December 31, 20X4, for $45 each. Both companies use perpetual inventory systems.
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- Jarvis owns 30% of McLintock. During the year to 31 December 20X4 McLintock sold $2 million of goods to Jarvis, of which 40% were still held in inventory by Jarvis at the year end. McLintock applies a mark-up of 25% on all goods sold. What effect would the above transactions have on group inventory at 31 December 20X4? A Debit group inventory $48,000 B Debit group inventory $160,000 C Credit group inventory $48,000 D No effect on group inventoryJarvis owns 30% of McLintock. During the year to 31 December 20X4 McLintock sold $2 million of goods to Jarvis, of which 40% were still held in inventory by Jarvis at the year end. McLintock applies a mark-up of 25% on all goods sold. What effect would the above transactions have on group inventory at 31 December 20X4?Silver Corporation owns 80 percent of Billy Company's stock. At the end of 20X8, Silver and Billy reported the following partial operating results and inventory balances: Total sales Sales to Billy Company Inventory on hand O $830,600. Silver Corporation O $775,800. O $865,600. O $925,400. $735,000 $147,000 Billy Company $528,000 Silver regularly prices its products at cost plus a 40 percent markup for profit. Billy prices its sales at cost plus a 20 percent markup. The total sales reported by Silver include both intercompany sales and sales to nonaffiliates. What amount of cost of goods sold will be reported in the 20X8 consolidated income statement? (Hint: be sure to find the COGS amount reported separately by these two companies first!) $44,100
- Woody Ltd sold inventory items to its subsidiary Buzz Lightyear Ltd and had the following intercompany transactions: Cost of inventory $600 000 sold for $750 000 for the year ended 30 June 2022. One third of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2022. Cost of inventory $200 000 sold for $150 000 for the year ended 30 June 2023. Half of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2023. Ignoring taxes, which of the following statements is correct with respect to this transaction only for the year ended 30 June 2023 A. Consolidated sales will decrease by $200 000 Consolidated sales will increase by $550 000 Consolidated profit will increase by $125 000. C. Consolidated profit will increase by $24 000 D. B.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 $696,000Marigold Corporation uses a perpetual inventory system and had inventory worth $73,500 at the beginning of the year. Purchases were made during the year for $323,000; however, 10% of these goods were returned to the supplier, and a 3% discount was taken on the remaining balance owing. Marigold paid $2,500 cash for freight to ship the inventory to its location during the year. Marigold reported cost of goods sold for the year of $245,000. Marigold has a calendar year end. What is the balance in the inventory account at the end of the year? Balance $
- On January 1, 20X1, River Company's Inventory was $400,000. During 20X1, the company purchased $1,900,000 of additional Inventory, and on December 31, 20X1, Its Inventory was $500,000. Required: What was the Inventory turnover for 20X1? Inventory turnover timesFromage purchased 80% of the equity shares in Frais on 1 January 20X1. During the year ended 31 December 20X1, Fromage sold inventory to Frais at a sales price of £50,000. None of the goods remained in Frais' inventory. Fromage applied a margin of 20%. Extracts from the statement of profit or loss for the two entities are shown below: Fromage Frais £000 £000 Revenue 1,000 750 Cost of sales (650) (250) What would be the revenue and cost of sales figures reported in the consolidated statement of profit or loss for the year ended 31 December 20X1? Answer to the nearest £000 a. Revenue 1700 Cost of sales 850 O b. Revenue 1750 Cost of sales 910 O c. Revenue 1700 Cost of sales 860 d. None of these options are correct Revenue 1550 Cost of sales 800In Problem 5-5 if the numbers where changed to this. Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $820,000 and cost of goods sold of $615,000. For this same period, Bottom has sales of $320,000 and cost of goods sold of $192,000. During the current year, Top sold merchandise to Bottom for $120,000. 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?
- Fall Company began operations in the current year. The entity used perpetual inventory system.1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n/30, FOB destination.2. Fall Company paid freight charge of P50,000.3. During the year, Fall Company paid for 80% of the merchandise within the discount period.4. The remaining 20% was paid beyond the discount period.5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required:Prepare journal entries to record the transactions using gross method and net method.Fall Company began operations in the current year. The entity used perpetual inventory system. 1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n/30, FOB destination. 2. Fall Company paid freight charge of P50,000. 3. During the year, Fall Company paid for 80% of the merchandise within the discount period. 4. The remaining 20% was paid beyond the discount period. 5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required: Prepare journal entries to record the transacions using gross method and net method.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.