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In-s [12.5K]
3 years ago
15

Parker Corp. owns 80% of Smith Inc.'s common stock. During Year 1, Parker sold Smith $250,000 of inventory on the same terms as

sales made to third parties. Smith sold all of the inventory purchased from Parker in Year 1. The following information pertains to Smith and Parker's sales for Year 1:
Parker:
Sales $ 1,000,000
Cost of sales 400,000
Total $ 600,000
Smith:
Sales $ 700,000
Cost of sales $ 350,000
Total $ 350,000
What amount should Parker report as cost of sales in its Year 1 consolidated income statement?
a. $750,000
b. $680,000
c. $500,000
d. $430,000
Business
1 answer:
IrinaVladis [17]3 years ago
7 0

Answer:

c. $500,000

Explanation:

Given that :

Parker Corp. owns 80% of Smith Inc.'s common stock

During Year 1, Parker sold Smith $250,000 of inventory

Therefore; adjusted for inter Corp. sales = $250,000

The following information pertains to Smith and Parker's sales for Year 1:

                         Parker                     Smith

Sales                 $ 1,000,000            $ 700,000

Cost of Sales    $400,000                $ 350,000

Total                   $ 600,000              $ 350,000

For the Unadjusted Cost of Sales of Parker and Smith = $400,000+$ 350,000

= $750,000

The amount that Parker should report as cost of sales in its Year 1 consolidated income statement = Unadjusted Cost of Sales - adjusted for inter Corp. sales

= $750,000 -  $250,000

= $500,000

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2 years ago
Read 2 more answers
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icang [17]

Answer:

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Explanation:

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p*q = 25p - 12p^2

the first derivative of the previous equation is the marginal revenue. In perfect competition the Price = Marginal revenue.

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2 years ago
Select the examples that best demonstrate likely tasks for Revenue and Taxation workers. Check all that apply.
ArbitrLikvidat [17]

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3 0
2 years ago
A company reported the following financial information: Taxable income for current year $120,000 Deferred income tax liability,
Inessa05 [86]

Answer:

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Third step is to calculate the deferred income tax asset increased

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3 0
3 years ago
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Answer:

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5 0
3 years ago
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