4. Pate Corp. owns 80% of Strange Inc.’s common stock. During 20X1, Pate sold inventory to Strange for $600,000 on the same terms as sales made to outside customers. Strange sold the entire inventory purchased from Pate by the end of 20X1. Pate and Strange report the following for 20X1. Pate Strange Sales $ 2,700,000 $ 1,600,000 Cost of sales 1,800,000 900,000 Gross profit $ 900,000 $ 700,000 Required: What amount should Pate report as sales revenue in its 20X1 consolidated income statement? What amount should Pate report as cost of sales in its 20X1 consolidated income statement? Amount a. Sales Revenue Amount $ b. Cost of sales amount $
4. Pate Corp. owns 80% of Strange Inc.’s common stock. During 20X1, Pate sold inventory to Strange for $600,000 on the same terms as sales made to outside customers. Strange sold the entire inventory purchased from Pate by the end of 20X1. Pate and Strange report the following for 20X1. Pate Strange Sales $ 2,700,000 $ 1,600,000 Cost of sales 1,800,000 900,000 Gross profit $ 900,000 $ 700,000 Required: What amount should Pate report as sales revenue in its 20X1 consolidated income statement? What amount should Pate report as cost of sales in its 20X1 consolidated income statement? Amount a. Sales Revenue Amount $ b. Cost of sales amount $
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 6MCQ: Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were...
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4.
Pate Corp. owns 80% of Strange Inc.’s common stock. During 20X1, Pate sold inventory to Strange for $600,000 on the same terms as sales made to outside customers. Strange sold the entire inventory purchased from Pate by the end of 20X1. Pate and Strange report the following for 20X1.
| Pate | Strange | ||||
| Sales | $ | 2,700,000 | $ | 1,600,000 | |
| Cost of sales | 1,800,000 | 900,000 | |||
| Gross profit | $ | 900,000 | $ | 700,000 | |
Required:
- What amount should Pate report as sales revenue in its 20X1 consolidated income statement?
- What amount should Pate report as cost of sales in its 20X1 consolidated income statement?
| Amount | ||
| a. | Sales Revenue Amount | $ |
| b. | Cost of sales amount | $ |
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