A parent owns 80% of its subsidiary's voting stock. At the end of the year, the subsidiary's ending inventory includes $15,000 in unconfirmed profit on merchandise purchased from the parent. The subsidiary's beginning inventory included unconfirmed profit of $10,000 on merchandise purchased from the parent. The parent's ending inventory includes $40,000 in unconfirmed profit on merchandise purchased from the subsidiary. The parent's beginning inventory included $35,000 in unconfirmed profit on merchandise purchased from the subsidiary. Consolidation eliminating entries (1) related to this information include a debit to the subsidiary's beginning retained earnings in the amount of
A parent owns 80% of its subsidiary's voting stock. At the end of the year, the subsidiary's ending inventory includes $15,000 in unconfirmed profit on merchandise purchased from the parent. The subsidiary's beginning inventory included unconfirmed profit of $10,000 on merchandise purchased from the parent. The parent's ending inventory includes $40,000 in unconfirmed profit on merchandise purchased from the subsidiary. The parent's beginning inventory included $35,000 in unconfirmed profit on merchandise purchased from the subsidiary. Consolidation eliminating entries (1) related to this information include a debit to the subsidiary's beginning retained earnings in the amount of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:A parent owns 80% of its subsidiary's voting stock. At the end of the year, the subsidiary's ending inventory includes $15,000 in
unconfirmed profit on merchandise purchased from the parent. The subsidiary's beginning inventory included unconfirmed
profit of $10,000 on merchandise purchased from the parent. The parent's ending inventory includes $40,000 in unconfirmed
profit on merchandise purchased from the subsidiary. The parent's beginning inventory included $35,000 in unconfirmed profit
on merchandise purchased from the subsidiary. Consolidation eliminating entries (1) related to this information include a debit to
the subsidiary's beginning retained earnings in the amount of
Select one:
O
O
a. $28,000
b. $ 8,000
c. $35,000
d. $10,000
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