During the current year, a parent sold inventory priced $800,000 to its subsidiary, and the parent's profits on thesesales amounted to $60,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outsidecustomers during the year. Here is what the parent and subsidiary report for total sales, cost of goods sold, and endinginventory at year-end (for total sales between the parent and subsidiary and to outside customers):Parent's Books Subsidiary's Books$ 300,000$ 150,0005,000,0003,500,0002,700,000InventorySales revenueCost of goods sold 4,000,000At what amounts should the year's consolidated financial statements report these three balances?Select one:a. Inventory: $450,000; Sales Revenue: $8,500,000; Cost of Goods Sold: $6,700,000b. Inventory: $450,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000c. Inventory: $390,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000d. Inventory: $150,000; Sales Revenue: $3,500,000; Cost of Goods Sold: $1,900,000

An asset that is meant to be sold in the regular course of business is called inventory. Not all…

During the current year, a parent sold inventory priced at $800,000 to its subsidiary, and the parent's profits on these sales amounted to $60,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outside customers during the year. Here is what the parent and subsidiary report for total sales, cost of goods sold, and ending inventory at year-end (for total sales between the parent and subsidiary and to outside customers): Parent's Books Subsidiary's Books Inventory $ 300,000 $ 150,000 Sales revenue 5,000,000 3,500,000 Cost of goods sold 4,000,000 2,700,000 At what amounts should the year's consolidated financial statements report these three balances? Select one: a. Inventory: $450,000; Sales Revenue: $8,500,000; Cost of Goods Sold: $6,700,000 b. Inventory: $450,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000 c. Inventory: $390,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000 d. Inventory: $150,000; Sales Revenue: $3,500,000; Cost of Goods Sold: $1,900,000

During the current year, a parent sold inventory priced at $800,000 to its subsidiary, and the parent's profits on these sales amounted to $60,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outside customers during the year. Here is what the parent and subsidiary report for total sales, cost of goods sold, and ending inventory at year-end (for total sales between the parent and subsidiary and to outside customers): Parent's Books Subsidiary's Books Inventory $ 300,000 $ 150,000 Sales revenue 5,000,000 3,500,000 Cost of goods sold 4,000,000 2,700,000 At what amounts should the year's consolidated financial statements report these three balances? Select one: a. Inventory: $450,000; Sales Revenue: $8,500,000; Cost of Goods Sold: $6,700,000 b. Inventory: $450,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000 c. Inventory: $390,000; Sales Revenue: $7,700,000; Cost of Goods Sold: $5,900,000 d. Inventory: $150,000; Sales Revenue: $3,500,000; Cost of Goods Sold: $1,900,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

10. During 20x9, PP Corporation recorded sales of inventory costing P500,0000 to SS Company, its wholly owned subsidiary, on the same terms as sales made to third parties. At December 31,20x9, SS held one- fifth of this goods inventory. The following information pertains to PP and SS's sales for 20x9: (see image below) In its 20x9 consolidated income statement, what amount should PP report as cost of sales? * PP P 2,000,000 (800,000) P1.200.000 SS P1,400,000 1700.000) P 700.000 Sales Cost of Sales Gross Profit Your answer
A subsidiary sells merchandise to its parent at a markup of 25% on cost. In the current year, the parent had $75,000 in merchandise purchased from the subsidiary in its beginning inventory. During the current year, the parent paid $750,000 for merchandise from the subsidiary. By year-end, the parent has sold $700,000 of merchandise purchased from the subsidiary to outside customers for $900,000.What is consolidated cost of goods sold for the year? Select one: A. $ 560,000 B. $1,300,000 C. $ 900,000 D. $ 750,000
What is the journal entry for Subsidiary if it sold an inventory bought at $300 to its Parent company at a price of $200?
Woody Ltd sold inventory items to its subsidiary Buzz Lightyear Ltd and had the following intercompany transactions: Cost of inventory $600 000 sold for $750 000 for the year ended 30 June 2022. One third of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2022. Cost of inventory $200 000 sold for $150 000 for the year ended 30 June 2023. Half of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2023. Ignoring taxes, which of the following statements is correct with respect to this transaction only for the year ended 30 June 2023 A. Consolidated sales will decrease by $200 000 Consolidated sales will increase by $550 000 Consolidated profit will increase by $125 000. C. Consolidated profit will increase by $24 000 D. B.
Dignity Company had the following consignment transactions during the current year:Inventory shipped on consignment to a consignee 600,000Freight paid by Dignity Company 50,000Inventory received on consignment from a consignor 800,000Freight paid by consignor 50,000 No sales of consigned goods were made during the current year. What amount should be reported as consigned inventory at year-end?
Accounting Woody Ltd sold inventory items to its subsidiary Buzz Lightyear Ltd and had the following intercompany transactions: Cost of inventory $600 000 sold for $750 000 for the year ended 30 June 2022. One third of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2022. Cost of inventory $200 000 sold for $150 000 for the year ended 30 June 2023. Half of the inventory items were sold by Buzz Lightyear Ltd to external parties before the financial year end 30 June 2023. Ignoring taxes, which of the following statements is correct with respect to this transaction only for the year ended 30 June 2023 А. Consolidated sales will decrease by $200 00 В. Consolidated sales will increase by $550 000 C. Consolidated profit will increase by $125 000. D. Consolidated profit will increase by $24 000 B.
James, Inc., sells inventory to Matthews Company, a related party, at James’s standard gross profit rate. At the current fiscal year-end, Matthews still holds some portion of this inventory. If consolidated financial statements are prepared, why are worksheet entries required in two different fiscal periods?
P8,000 a. P24,000 17. During 20x4, a parent sold inventory priced at P1,000,000 to its subsidiary, and the parent's profits on these sales amounted to P50,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outside customers during 20x4. Here is what the parent and subsidiary report for total sales, cost of goods sold, and ending inventory at December 31, 20x4 (for total sales between the parent and subsidiary and to outside customers): Inventory Sales revenue Cost of goods sold Parent's books P 300,000 5,000,000 4,000,000 llen th At what amounts should the 20x4 consolidated financial statements report these three balances? Inventory Sales revenue Cost of goods sold a. P450,000 P8,500,000 P5,700,000 b. P400,000 P7,500,000 P5,700,000 c. P450,000 P7,500,000 P5,700,000 d. P400,000 P8,500,000 P6,700,000 10. 01 Subsidiary's books P 150,000 3,500,000 2,700,000
Selected information from the separate and consolidated income statements of Poster Corporation and its subsidiary, Sign Company for the year ended December 31, 20x2 are as follows: Poster Corp. Sign Co. Consolidated Sales P 600,000 P 420,000 P 924,000 Cost of Goods Sold 450,000 335,000 693,000 Gross Profit P 150,000 P 85,000 P 231,000 During 2025, Poster Corporation sold goods to Sign Company at the same mark-up on cost that Poster uses for all sales. At December 31, 20x2, Sign had not paid all of these goods and still held 25% of them in inventory. What is the amount of intercompany sale of inventor?
Basketball Co. wholly owns Volleyball Co. During the year, Basketball purchased inventory from Volleyball. Volleyball has marked-up the goods at 20% above cost. How should the group compute for the consolidated cost of sales? * A. Cost of sales of Basketball plus cost of sales of Volleyball minus intercompany sales B. Cost of sales of Basketball plus cost of sales of Volleyball minus intercompany sales minus unrealized profit in ending inventory and plus realized profit in beginning inventorY C. Cost of sales of Basketball plus cost of sales of Volleyball minus intercompany sales plus unrealized profit in ending inventory and minus realized profit in beginning inventory D. Cost of sales of Basketball plus cost of sales of Volleyball
At the beginning of current year, Cavalier Company reported Problem 14-4 (PHILCPA Adapted) During the current year, the entity registered the following At the beginning of current year, Cavalier Company reported inventory of P1,000,000 at retail and P560,000 at cost. During the current year, the entity registered the followine purchases: Cost Retail price Original markup 4,000,000 6,200,000 2,200,000 The net sales totaled P5,400,000. The following reductions were made in the retail price: To meet price competition To dispose of overstock Miscellaneous reductions 50,000 30,000 120,000 During the current year, the selling price of a certain inveritory increased from P200 to P300. This additional markup applied to 5,000 items but was later canceled on the remaining 1,000 items. What is the ending inventory using the average cost approach in applying the retail method? a. 2,000,000 b. 2,400,000 c. 1,240,000 d. 1,200,000
Fall Company began operations in the current year. The entity used perpetual inventory system.1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n/30, FOB destination.2. Fall Company paid freight charge of P50,000.3. During the year, Fall Company paid for 80% of the merchandise within the discount period.4. The remaining 20% was paid beyond the discount period.5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required:Prepare journal entries to record the transactions using gross method and net method.