Paulsen Corp acquired 70% of the voting common stock of Shipley Stores at book value equal to fair value several years ago. Paulsen manufactures home furnishings which are sold at a standard markup to department stores, as well as to its own outlet shop, Shipley Outlet Stores. Separate incomes of Paulsen and Shipley for 2013 are follows: Paulsen Shipley Sales $ 800,000 $ 500,000 Cost of Sales $ 500,000 $ 300,000 Gross Profit $ 300,000 $ 200,000 Intercompany sales from Paulsen to Shipley for 2012 and 2013 are summarized as follows: Selling Price Unsold at year-end $375,000 40% 50% Cost Intercompany sales 2012 $ 300,000 Intercompany sales 2013 $ 200,000 $250,000
Paulsen Corp acquired 70% of the voting common stock of Shipley Stores at book value equal to fair value several years ago. Paulsen manufactures home furnishings which are sold at a standard markup to department stores, as well as to its own outlet shop, Shipley Outlet Stores. Separate incomes of Paulsen and Shipley for 2013 are follows: Paulsen Shipley Sales $ 800,000 $ 500,000 Cost of Sales $ 500,000 $ 300,000 Gross Profit $ 300,000 $ 200,000 Intercompany sales from Paulsen to Shipley for 2012 and 2013 are summarized as follows: Selling Price Unsold at year-end $375,000 40% 50% Cost Intercompany sales 2012 $ 300,000 Intercompany sales 2013 $ 200,000 $250,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A4
Transcribed Image Text:Q1- The 2013 consolidated income statement will show sales of:
a. $925,000
b. $1,020,000
c. $1,100,000
d. $1,125,000
e. None of the above
Q2-The 2013 consolidated income statement will show cost of sales of:
a. $525,000
b. $545,000
c. $550,000
d. $555,000
e. None of the above
Transcribed Image Text:Paulsen Corp acquired 70% of the voting common stock of Shipley Stores at book value equal
to fair value several years ago. Paulsen manufactures home furnishings which are sold at a
standard markup to department stores, as well as to its own outlet shop, Shipley Outlet
Stores. Separate incomes of Paulsen and Shipley for 2013 are follows:
Sales
$
Cost of Sales $
Gross Profit $
Paulsen
800,000 $
500,000 $
300,000
300,000 $ 200,000
Shipley
500,000
Intercompany sales from Paulsen to Shipley for 2012 and 2013 are summarized as follows:
Intercompany sales 2012 $
Intercompany sales 2013 $
Cost
300,000
200,000
Selling Price Unsold at year-end
$375,000
40%
$250,000
50%
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