1

Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports...

Question

Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports...

Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $908,000 and cost of goods sold of $681,000. For this same period, Bottom has sales of $379,000 and cost of goods sold of $303,200. During the current year, Bottom sold merchandise to Top for $183,000. The parent still possesses 25 percent of this inventory at the current year-end. Bottom had established the transfer price based on its normal gross profit rate. What are the consolidated sales and cost of goods sold?

A)$1,066,100 and $993,350.

B)$1,104,000 and $816,450.

C)$1,104,000 and $846,950.

D)$1,104,000 and $810,350.

Answers

Answer:d (1104000 and 810350)

Explanation

Top company :

Sales= 908000

Cost of good sold =681000

Bottom company:

sales= 379000

Cost of good sold 303200

Top sold merchandise to bottom for= 183000

We will compute the cost of good sold

Gross profit= 379000-303200=75800

=75800/379000= 20%

Intra entity gross profit= 183000*25%= 45750*20%= 9150

Top COGS 681000
Bottom COGS 303200
Total COGS 984200
Intra entity transfer (183000)
Intra entity GP 9150
Consolidated COGS 810350

We will compute consolidated sales

Consolidated sales =(top sales + bottom sales -intra entity transfer)

= (908000+379000-183000)= 1104000


Similar Solved Questions

1 answers
10 pts The regression equation for the given data points is provided. Graph the regression equation...
10 pts The regression equation for the given data points is provided. Graph the regression equation and the data points. x 10 14 20 6 6 14 16 24 32 36 y 19 23 29 12 17 23 25 33 37 5 A = 9.3 +0.95% 40 30 20+ 10+ 4 8 12 16 20 24 28 32 36 40 %...
1 answers
The George Company has a policy of maintaining an end-of-month cash balance of at least $33,000....
The George Company has a policy of maintaining an end-of-month cash balance of at least $33,000. In months where a shortfall is expected, the company can draw In $1,000 Increments on a line of credit it has with a local bank, at an Interest rate of 12% per annum. All borrowings are assumed for budge...
1 answers
21. Which of the 24. hich of the following meets one of the DOT 10 to...
21. Which of the 24. hich of the following meets one of the DOT 10 to Collection Site Security & Integrity for collecting urine drug screening samples? Employees must empty pockets and leave any bags behind. h Inspection of the site is performed after sample collection. Specimens are delivered t...
1 answers
Problem 7-35 (LO. 3, 4) On July 24 of the current year, Sam Smith was involved...
Problem 7-35 (LO. 3, 4) On July 24 of the current year, Sam Smith was involved in an accident with his business use automobile. Sam had purchased the car for $30,000. The automobile had a fair market value of $20,000 before the accident and $8,000 immediately after the accident. Sam has taken $20,00...
1 answers
Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced. The company has four...
Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Basic Advanced Total Units produced 140,000 420,000 Prime...
1 answers
A calendar year reporting company preparing its annual financial statements should use the phrase "For the...
A calendar year reporting company preparing its annual financial statements should use the phrase "For the twelve months ended as of December 31, 2017" in the heading of which financial statements? A. This heading would be used on the statement of cash flows. В. · This heading w...
1 answers
In what ways does globalization and neo-liberal ideology harm a population’s health?
In what ways does globalization and neo-liberal ideology harm a population’s health?...
1 answers
Assuming small amplitude ( n p lane waves Consider a quiescent body of water of depth...
assuming small amplitude ( n p lane waves Consider a quiescent body of water of depth has shown in Fig. 4. A small amplitude plane wave I travelling along the surface of the water with velocity c. The form of waves is taken to be sodal in which the amplitude of the wave is and its wavelength is i. T...
1 answers
Resues Iol
Resues Iol...
1 answers
4-2 A tension membe For purposes of cutting and gluing, the angle Omust be between 25°...
4-2 A tension membe For purposes of cutting and gluing, the angle Omust be between 25° and 45o. The allowable stresses on the glued joint in tension and shearP are 7.00 MPa and 4.00 MPa, respectively, determine r is to be constructed of two pieces of plastic glued along plane pq (see figure) (a)...
1 answers
The pair of words "young" and "song" that end two different lines of poetry are known...
The pair of words "young" and "song" that end two different lines of poetry are known as A. close rhymes. B. dissonant rhymes. C. assonant rhymes. D. slant rhymes....
1 answers
Question 1 0.24 / 0.3 points A country produces cars and scooters using only manual labor....
Question 1 0.24 / 0.3 points A country produces cars and scooters using only manual labor. All its workers are identical. In a unit of time, each worker can assemble four cars or twenty scooters. Mark ALL the statements from the list below that you view as correct. In autarky, Pscooter / Pear -0.2 I...
1 answers
In an isosceles triangle with legs that are 1 unit long, the angles are 45 degrees, 67.5 degrees and 67.5 degrees What is its area?
In an isosceles triangle with legs that are 1 unit long, the angles are 45 degrees, 67.5 degrees and 67.5 degrees What is its area?...
1 answers
How do you solve the triangle given A= 48 deg C=97 deg a=12?
How do you solve the triangle given A= 48 deg C=97 deg a=12?...
1 answers
Q1 (10 points) Consider the differential equation ty" _ y = 0. a) is this differential...
Q1 (10 points) Consider the differential equation ty" _ y = 0. a) is this differential equation linear? What is its order? Is it homogeneous? b) Try a solution of the form y=x". Is this a solution for some r? If so, find all such r. c) Based on your answer to a) about linearity and b) about ...
1 answers
Problem 12 3A The income statement of Buffalo Industries is presented here. Buffalo Industries Income Statement...
Problem 12 3A The income statement of Buffalo Industries is presented here. Buffalo Industries Income Statement For the Year Ended November 30, 2017 Sales revenue $7,561,700 Cost of goods sold $1,927,000 4,337,800 6,264,800 1,618,200 Beginning inventory Goods available for sale Ending inventory Tota...
1 answers
Ethylene glycol (C₂H₆O₂) is used as an additive to the water in your automobile to lower...
Ethylene glycol (C₂H₆O₂) is used as an additive to the water in your automobile to lower its freezing point. A solution of ethylene glycol in water has a freezing point of -4.10°C. How many grams of ethylene glycol must be added to 1000 g of this solution to lower the freezing ...
1 answers
3. (7pts.) A closed system contains one mole of an ideal gas with constant heat capacities...
3. (7pts.) A closed system contains one mole of an ideal gas with constant heat capacities and 5/3 at Ti 400 K. The gas undergoes a constant-pressure process during which it receives = 62355/ ofheat. Calculate the final temperature of the gas, T2, the work produced, w, and the entropy change, &Delta...
1 answers
Frequencies of an organ pipe are determined to be 702 Hz and 810 HE. (Assume the...
frequencies of an organ pipe are determined to be 702 Hz and 810 HE. (Assume the speed of sound is 343 m/s.) a) Calculate the fundamental frequency of this pipe xt our response differs from the correct answer by more than 100%. Hz (b) Calculate the length of this pipe....

-- 0.010119--