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Fan Co holds 80% of the common stock of Pen Co. During 2010, Fan reported sales of $2,460,000 and a cost of goods sold of $1,000,000. For this same period, Pen had sales of $670,000 and a cost of goods sold of $320,000. Included in the amounts for Fan's sales were Fan's sales of merchandise to Pen for $250,000. There were no sales from Pen to Fan. Intra-entity sales had the same mark-up as sales to outsiders. Pen still had 30% of the intra-entity sales as inventory at the end of 2010. What are the consolidated sales and cost of goods sold for 2010?

Fan Co holds 80% of the common stock of Pen Co. During 2010, Fan reported sales of $2,460,000 and a cost of goods sold of $1,000,000. For this same period, Pen had sales of $670,000 and a cost of goods sold of $320,000. Included in the amounts for Fan's sales were Fan's sales of merchandise to Pen for $250,000. There were no sales from Pen to Fan. Intra-entity sales had the same mark-up as sales to outsiders. Pen still had 30% of the intra-entity sales as inventory at the end of 2010. What are the consolidated sales and cost of goods sold for 2010?

FINANCIAL ACCOUNTING
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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Fan Co holds 80% of the common stock of Pen Co. During 2010, Fan reported sales of $2,460,000 and a cost of goods sold of $1,000,000. For this same period, Pen had sales of $670,000 and a cost of goods sold of $320,000. Included in the amounts for Fan's sales were Fan's sales of merchandise to Pen for $250,000. There were no sales from Pen to Fan. Intra-entity sales had the same mark-up as sales to outsiders. Pen still had 30% of the intra-entity sales as inventory at the end of 2010. What are the consolidated sales and cost of goods sold for 2010?
Transcribed Image Text:Fan Co holds 80% of the common stock of Pen Co. During 2010, Fan reported sales of $2,460,000 and a cost of goods sold of $1,000,000. For this same period, Pen had sales of $670,000 and a cost of goods sold of $320,000. Included in the amounts for Fan's sales were Fan's sales of merchandise to Pen for $250,000. There were no sales from Pen to Fan. Intra-entity sales had the same mark-up as sales to outsiders. Pen still had 30% of the intra-entity sales as inventory at the end of 2010. What are the consolidated sales and cost of goods sold for 2010?
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