Z Inc. acquired 75% of the outstanding voting common stock of Y Inc. on January 1, 2016, for $350,00. At the end of 2016, Z Inc. reported revenues of $300,000 and Y Inc. reported revenues of $210,000. During 2016, Z Inc. sold inventory for $75,000 to Y Inc. which has paid only half of this purchase till the end of 2016. Also, 60% of these goods are still in Y Inc.'s warehouse. What should be recorded as consolidated revenues for 2016 by Z Inc.?

Z Inc. acquired 75% of the outstanding voting common stock of Y Inc. on January 1, 2016, for $350,00. At the end of 2016, Z Inc. reported revenues of $300,000 and Y Inc. reported revenues of $210,000. During 2016, Z Inc. sold inventory for $75,000 to Y Inc. which has paid only half of this purchase till the end of 2016. Also, 60% of these goods are still in Y Inc.'s warehouse. What should be recorded as consolidated revenues for 2016 by Z Inc.?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

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Z Inc. acquired 75% of the outstanding voting common stock ofY Inc. on January 1, 2016,
for $350,00. At the end of 2016, Z Inc. reported revenues of $300,000 and Y Inc. reported
revenues of $210,000.
During 2016, Z Inc. sold inventory for $75,000 to Y Inc. which has paid only half of this
purchase till the end of 2016. Also, 60% of these goods are still in Y Inc.'s warehouse.
What should be recorded as consolidated revenues for 2016 by Z Inc.?
a. $435,000
b. $465,000
c. $510,000
d. $457,500

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