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Phone Corporation owns 80 percent of Smart Company's stock. At the end of 20X8, Phone and Smart reported the following partial operating results and inventory balances: Total sales Sales to Smart Company Sales to Phone Corporation Net income Operating income (excluding investment income from Smart) Inventory on hand, December 31, 20X8, purchased from: Smart Company Phone Corporation Phone Corporation $728,000 150,500 82,000 Amount of sales 50, 100 Required: a. What amount of sales will be reported in the consolidated income statement for 20X8? Smart Company $543,000 250, 500 32,000 Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany sales and sales to nonaffiliates. 45, 150

Phone Corporation owns 80 percent of Smart Company's stock. At the end of 20X8, Phone and Smart reported the following partial operating results and inventory balances: Total sales Sales to Smart Company Sales to Phone Corporation Net income Operating income (excluding investment income from Smart) Inventory on hand, December 31, 20X8, purchased from: Smart Company Phone Corporation Phone Corporation $728,000 150,500 82,000 Amount of sales 50, 100 Required: a. What amount of sales will be reported in the consolidated income statement for 20X8? Smart Company $543,000 250, 500 32,000 Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany sales and sales to nonaffiliates. 45, 150

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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Phone Corporation owns 80 percent of Smart Company's stock. At the end of 20X8, Phone and Smart reported the following partial operating results and inventory balances: Total sales Sales to Smart Company Sales to Phone Corporation Net income Operating income (excluding investment income from Smart) Inventory on hand, December 31, 20x8, purchased from: Smart Company Phone Corporation Phone Corporation $728,000 150,500 82,000 50, 100 Amount of sales Required: a. What amount of sales will be reported in the consolidated income statement for 20X8? Smart Company $543,000 250,500 32,000 Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany sales and sales to nonaffiliates. 45,150
Transcribed Image Text:Phone Corporation owns 80 percent of Smart Company's stock. At the end of 20X8, Phone and Smart reported the following partial operating results and inventory balances: Total sales Sales to Smart Company Sales to Phone Corporation Net income Operating income (excluding investment income from Smart) Inventory on hand, December 31, 20x8, purchased from: Smart Company Phone Corporation Phone Corporation $728,000 150,500 82,000 50, 100 Amount of sales Required: a. What amount of sales will be reported in the consolidated income statement for 20X8? Smart Company $543,000 250,500 32,000 Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany sales and sales to nonaffiliates. 45,150
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