A parent company purchases inventory from its subsidiary, which adds a markup of 25% on cost. At year-end, the parent's inventory includes $120,000 of goods purchased from the subsidiary (at transfer price). What amount should be eliminated from the consolidated ending inventory? A) $24,000 B) $30,000 C) $96,000 D) $120,000

A parent company purchases inventory from its subsidiary, which adds a markup of 25% on cost. At year-end, the parent's inventory includes $120,000 of goods purchased from the subsidiary (at transfer price). What amount should be eliminated from the consolidated ending inventory? A) $24,000 B) $30,000 C) $96,000 D) $120,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

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During the current year, a parent sold inventory priced $800,000 to its subsidiary, and the parent's profits on these sales amounted to $60,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outside customers during the year. Here is what the parent and subsidiary report for total sales, cost of goods sold, and ending inventory at year-end (for total sales between the parent and subsidiary and to outside customers): Parent's Books Subsidiary's Books $ 300,000 $ 150,000 5,000,000 3,500,000 2,700,000 Inventory Sales revenue Cost of goods sold 4,000,000 At what amounts should the year's consolidated financial statements report these three balances? Select one: a. Inventory: $450,000; Sales Revenue: $8,500,000; Cost of Goods Sold: $6,700,000 b. Inventory: $450,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000 c. Inventory: $390,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000 d. Inventory: $150,000; Sales Revenue: $3,500,000;…
Sure Corporation, a 75% own subsidiary of Pretty Corporation sells inventory to its parent at 125% above cost, while Pretty Corporation sells merchandise to its subsidiary at 120% of cost. Inventories of the two companies for 2020 are as follows: Beginning inventory Ending inventory Pretty Corp. P400,000 500,000 Sure Corp. P250,000 200,000 Pretty Corporation's beginning and ending inventories include merchandise acquired from Sure Corporation of P150,000 and P200,000, respectively. Sure Corporation also reported beginning and ending inventories from Pretty Corporation of P80,000 and P60,000, respectively. Required: 1. If Sure Corporation reported a net income for 2020 of P300,000, the non-controlling interest on subsidiary net income is: 2. In the consolidated balance sheet, inventories should be reported at:
An entity included the following items in inventory at year-end: Goods out on consignment at sales price, including a 40% markup on cost: P1,400,000 Goods purchased in transit, shipped FOB Destination: 1,250,000 Goods held on consignment by the entity: 1,010,000 At what amount should the inventory at year-end be reduced? a. 1,460,000 b. 2,660,000 c. 1,300,000 d. 2,500,000
A subsidiary sells merchandise to its parent at a markup of 25% on cost. In the current year, the parent had $75,000 in merchandise purchased from the subsidiary in its beginning inventory. During the current year, the parent paid $750,000 for merchandise from the subsidiary. By year-end, the parent has sold $700,000 of merchandise purchased from the subsidiary to outside customers for $900,000.What is consolidated cost of goods sold for the year? Select one: A. $ 560,000 B. $1,300,000 C. $ 900,000 D. $ 750,000
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1. what is the amount of the unrealised profit to be eliminated if the parente year end inventory includes at $540,000 goods invoiced to it by its 60% owned subsidiary at cost plus 25 %
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1. The inventory on hand on December 31, 2020 for Univ Company is valued at P1,500,000. The entity's policy on its selling is 150% of cost. The following were not included in the inventory: 1. Purchases of goods still in transit, shipped FOB Destination, with price of P150,000, which includes freight charge of P25,000 2. Goods held on consignment by Univ at a sales price of P100,000, excluding 20% commission based on sales price. Freight paid by Univ is P10,000. 3. Goods sold in transit FOB Destination with invoice price of P245,000 which includes a freight charge of P20,000 to deliver the goods. 4. Purchases of goods still in transit FOB Shipping point with invoice of P300,000. Freight cost, P50,000 5. Goods out on consignment with sales price of P300.000. Shipping cost to consignee is P20,000. What is the correct amount of inventory at December 31 2020?
P8,000 a. P24,000 17. During 20x4, a parent sold inventory priced at P1,000,000 to its subsidiary, and the parent's profits on these sales amounted to P50,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outside customers during 20x4. Here is what the parent and subsidiary report for total sales, cost of goods sold, and ending inventory at December 31, 20x4 (for total sales between the parent and subsidiary and to outside customers): Inventory Sales revenue Cost of goods sold Parent's books P 300,000 5,000,000 4,000,000 llen th At what amounts should the 20x4 consolidated financial statements report these three balances? Inventory Sales revenue Cost of goods sold a. P450,000 P8,500,000 P5,700,000 b. P400,000 P7,500,000 P5,700,000 c. P450,000 P7,500,000 P5,700,000 d. P400,000 P8,500,000 P6,700,000 10. 01 Subsidiary's books P 150,000 3,500,000 2,700,000