Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7, at underlying book value. On that date, the fair va
lue of noncontrolling interest was equal to 10 percent of the book value of Scrooge Corporation. Pilfer purchased inventory from Scrooge for $90,000 on August 20, 20X8, and resold 70 percent of the inventory to unaffiliated companies on December 1, 20X8, for $100,000. Scrooge produced the inventory sold to Pilfer for $67,000. The companies had no other transactions during 20X8. Based on the information given above, what amount of sales will be reported in the 20X8 consolidated income statement?
A) $90,000
B) $120,000
C) $100,000
D) $67,000
Scrooge was RESOLD to companies that they are unaffiliated to on December 1, 20X8 for the amount of $100,000 which means that the amount of sales that will be reported in the 20X8 CONSOLIDATED INCOME STATEMENT
will be inventory amount of $100,000 that was resold to the unaffiliated companies.
It is type of allowance that offer retailer to market quantities of item for a particular period of time. The main purpose of this bills is to cope up with competition and to advertise new product in the market.
It is a reduction in price made by manufacturer to retailer so to promote their product in a faster way.
