During the current year, a parent sold inventory priced $800,000 to its subsidiary, and the parent's profits on thesesales amounted to $60,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outsidecustomers during the year. Here is what the parent and subsidiary report for total sales, cost of goods sold, and endinginventory at year-end (for total sales between the parent and subsidiary and to outside customers):Parent's Books Subsidiary's Books$ 300,000$ 150,0005,000,0003,500,0002,700,000InventorySales revenueCost of goods sold 4,000,000At 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: $6,700,000b. Inventory: $450,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000c. Inventory: $390,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000d. Inventory: $150,000; Sales Revenue: $3,500,000; Cost of Goods Sold: $1,900,000

An asset that is meant to be sold in the regular course of business is called inventory. Not all…

During the current year, a parent sold inventory priced at $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 Inventory $ 300,000 $ 150,000 Sales revenue 5,000,000 3,500,000 Cost of goods sold 4,000,000 2,700,000 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; Cost of Goods Sold: $1,900,000

During the current year, a parent sold inventory priced at $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 Inventory $ 300,000 $ 150,000 Sales revenue 5,000,000 3,500,000 Cost of goods sold 4,000,000 2,700,000 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; Cost of Goods Sold: $1,900,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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