TT Company owns 100 percent of the capital stock of both BB Corporation and CC Corporation. BB purchases merchandise inventory from CC at 125 percent of CC's cost. During 20x9, CC sold inventory to BB that it had purchased for P25,000. BB sold all of this merchandise to unrelated customers for P56,892 during 20x9. In preparing combined financial statements for 20x9, TT's bookkeeper disregarded the common ownership of BB and CC. What amount should be eliminated from cost of goods sold in the combined income statement for 20x9?
TT Company owns 100 percent of the capital stock of both BB Corporation and CC Corporation. BB purchases merchandise inventory from CC at 125 percent of CC's cost. During 20x9, CC sold inventory to BB that it had purchased for P25,000. BB sold all of this merchandise to unrelated customers for P56,892 during 20x9. In preparing combined financial statements for 20x9, TT's bookkeeper disregarded the common ownership of BB and CC. What amount should be eliminated from cost of goods sold in the combined income statement for 20x9?
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 24P
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TT Company owns 100 percent of the capital stock of both BB Corporation and CC Corporation. BB purchases merchandise inventory from CC at 125 percent of CC's cost. During 20x9, CC sold inventory to BB that it had purchased for P25,000. BB sold all of this merchandise to unrelated customers for P56,892 during 20x9. In preparing combined financial statements for 20x9, TT's bookkeeper disregarded the common ownership of BB and CC. What amount should be eliminated from cost of goods sold in the combined income statement for 20x9?
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