1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Marizza181 [45]
3 years ago
12

Tulip Co. owns 100% of Daisy Co.'s outstanding common stock. Tulip's cost of goods sold for the year totals $600,000 and Daisy's

cost of goods sold totals $400,000. During the year, Tulip sold inventory costing $60,000 to Daisy for $100,000. By the end of the year, all transferred inventory was sold to third parties. What amount should be reported as cost of goods sold in the consolidated statement of income?
Business
1 answer:
dsp733 years ago
6 0

Answer:

Amount to be reported as cost of goods sold in the consolidated financial statement = $900,000

Explanation:

When a company holds 100% shares or more than 50% shares of another company that is common stock, they establish a holding subsidiary relationship in which equity method is to be followed.

As per equity method all the cost of goods sold by that of subsidiary is to be added to financial statements of holding while making consolidated financial statements.

In this if there are any sales or purchase between holding and subsidiary then such profit is not be added up till that inventory is further sold to third party.

In case the inventory is sold to third party then entire profit that is inclusive of holding to subsidiary is to be included as part of consolidated financial statements.

Therefore in the above case since Daisy has sold the inventory purchased from Tulip, entire cost of goods sold shall form part of consolidated financial statements.

Here amount to be reported as cost of goods sold in the consolidated financial statement = $600,000 + $400,000 = $1,000,000

Further the cost of goods sold is included 2 times, first in Tulip's account for $60,000 and then the same in Daisy's account for $100,000. In consolidated statement double amount should not be added, thus net cost of goods sold = $1,000,000 - $100,000 = $900,000

You might be interested in
Milano Gallery purchases the copyright on a painting for $420,000 on January 1. The copyright is good for 10 more years. The com
alex41 [277]

Answer:

Explanation:

The journal entries are shown below:

On January 1

Copyright A/c Dr $420,000

        To Cash A/c $420,000

(Being copyright is purchased)

On December 31

Amortization A/c Dr $42,000

          To Accumulated amortization A/c $42,000

(Being annual amortization is recorded)

The computation is shown below:

= Purchase value of copyright ÷  number of goods years

= $420,000 ÷ 10 years

= $42,000

6 0
2 years ago
From the list below, which items are classified as a materials activity:
Katena32 [7]
Im gonna go with e sorry if it’s wrong
6 0
3 years ago
Which of the following statements is true​?
stich3 [128]

Answer:

The correct answer is option C.

Explanation:

A monopolistic competitive firm has a downward sloping demand curve. Such a firm is a price maker. It decides price and output through the interaction of the marginal revenue and marginal cost.

The marginal revenue is the change in revenue because of selling an additional output. At high prices, the marginal revenue will be positive while at low prices it will be negative.

4 0
3 years ago
Suppose the price of gasoline decreases from $4.20 to $2.00, and in response quantity demanded increases from 10600 to 11200. Us
Tems11 [23]

Answer:

0.079

Explanation:

Price elasticity of demand using midpoint formula can be calculated as follows

Formula

Elasticity of demand = (change in quantity/average quantity)/(change in price/average price)

Calculation

Elasticity of demand = (600/10,900)/(-2.1/3.05)

Elasticity of demand =-0.055 / -0.688

Elasticity of demand =-0.079

working

Change in price (2-4.1) = -2.1  

Average price (2+4.1)/2=3.05

Change in quantity (11,200-10600) = 600

average quantity (11,200+10,600)/2 = 10,900

 

The elasticity of demand is inelastic as the elasticity is below 1.

4 0
2 years ago
The _____ is an agency of the federal government that offers both managerial and financial assistance to small businesses.
Reil [10]

Answer:

D. Small Business Administration.

Explanation:

The Small Business Administration (SBA) is an agency of the federal government that offers both managerial and financial assistance to small businesses. SBA was established in 1953 as an autonomous or independent agency of the government of the United States of America. Generally, it is saddled with the responsibility of providing both managerial and financial assistance and counseling to small businesses in order to bolster the American economy.

The small business administration (SBA) serves as an intermediary between entrepreneurs and investors or creditors, in order to provide them with the necessary funds required to plan, start and grow their business.

<em>Basically, SBA provides services such as entrepreneurial development, access to funds, advocacy and contracting to small businesses (entrepreneurs) in the United States of America. </em>

5 0
3 years ago
Other questions:
  • When comparing and weighing alternatives during ethical decision-making in business, we should focus on the firm and its stakeho
    15·1 answer
  • Prepare journal entries for each of the following
    7·1 answer
  • Under the Uniform Limited Liability Company Act (ULLCA), managers in a manager-managed LLC owe fiduciary duties, such as the dut
    14·2 answers
  • Sadie contracted with Sean, who agreed to replace the carpets in her house. Sean damaged some of the walls when he installed the
    7·1 answer
  • Suppose canada has a population of 30 million people, and labore force participation rate of 2/3. furthermoew, suppose the natur
    6·2 answers
  • Armour, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was esti
    13·1 answer
  • Frank slips and falls on Guy's Harbor Tour Boat and is injured. Frank files a suit against Guy's for $500,000. If Frank is 20 pe
    13·1 answer
  • The _____ was/were enacted to restore confidence in financial reporting and business ethics after the accounting scandals of the
    11·1 answer
  • StuckinMyHouse book company is a boutique shop that produces a small selection of adult coloring books. The first quarter 2020 M
    8·1 answer
  • "A pattern day trading account has a high market value during the day of $200,000 and has a "0" position at the end of the day.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!