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Perth Corporation owns 90 percent of Sydney Company's stock. At the end of 20X8, Perth and Sydney reported the following partial operating results and inventory balances:   Perth Corporation Sydney Company Total sales $ 500,000   $ 350,000   Sales to Sydney Company   100,000         Sales to Perth Corporation         150,000   Net income         15,000   Operating income (excluding investment income from Sydney)   56,000         Inventory on hand, December 31, 20X8, purchased from:             Sydney Company   36,000         Perth Corporation         31,000   Perth regularly prices its products at cost plus a 30 percent markup for profit. Sydney prices its sales at cost plus a 10 percent markup. The total sales reported by Perth and Sydney include both intercompany sales and sales to nonaffiliates. Based on the information given above, what amount of sales will be reported in the consolidated income statement for 20X8?     $800,000     $500,000     $600,000     $850,000

Perth Corporation owns 90 percent of Sydney Company's stock. At the end of 20X8, Perth and Sydney reported the following partial operating results and inventory balances:   Perth Corporation Sydney Company Total sales $ 500,000   $ 350,000   Sales to Sydney Company   100,000         Sales to Perth Corporation         150,000   Net income         15,000   Operating income (excluding investment income from Sydney)   56,000         Inventory on hand, December 31, 20X8, purchased from:             Sydney Company   36,000         Perth Corporation         31,000   Perth regularly prices its products at cost plus a 30 percent markup for profit. Sydney prices its sales at cost plus a 10 percent markup. The total sales reported by Perth and Sydney include both intercompany sales and sales to nonaffiliates. Based on the information given above, what amount of sales will be reported in the consolidated income statement for 20X8?     $800,000     $500,000     $600,000     $850,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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QUESTION 36

  1. Perth Corporation owns 90 percent of Sydney Company's stock. At the end of 20X8, Perth and Sydney reported the following partial operating results and inventory balances:

      Perth
    Corporation    		 Sydney
    Company
    Total sales $ 500,000   $ 350,000  
    Sales to Sydney Company   100,000        
    Sales to Perth Corporation         150,000  
    Net income         15,000  
    Operating income (excluding investment income from Sydney)   56,000        
    Inventory on hand, December 31, 20X8, purchased from:            
    Sydney Company   36,000        
    Perth Corporation         31,000  

    Perth regularly prices its products at cost plus a 30 percent markup for profit. Sydney prices its sales at cost plus a 10 percent markup. The total sales reported by Perth and Sydney include both intercompany sales and sales to nonaffiliates.


    Based on the information given above, what amount of sales will be reported in the consolidated income statement for 20X8?
       
    $800,000
       
    $500,000
       
    $600,000
       
    $850,000
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