question archive 1) During the year a parent makes sales of inventory at a profit to its 75 percent owned subsidiary
1) During the year a parent makes sales of inventory at a profit to its 75 percent owned subsidiary
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1) During the year a parent makes sales of inventory at a profit to its 75 percent owned subsidiary. The subsidiary also makes sales of inventory at a profit to its parent during the same year. Both the parent and the subsidiary have on hand at the end of the year 20 percent of the inventory acquired from one another. Consolidated revenues for the year should exclude:
80 percent of the total revenues from intercompany sales.
only the revenues from the subsidiary's intercompany sales.
only the revenues from the parent's intercompany sales.
total revenues from intercompany sales.
2) A wholly owned subsidiary sold land to its parent during the year at a gain. The parent continues to hold the land at the end of the year. The amount to be reported as consolidated net income for the year should equal:
the parent's separate operating income, plus the subsidiary's net income.
the parent's net income, plus the subsidiary's net income, minus the intercompany gain.
the parent's separate operating income, plus the subsidiary's net income, minus the intercompany gain.
the parent's separate operating income, plus the subsidiary's net income, plus the intercompany gain.
Option 1
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