Pot Co Holds 90% of the Common Stock of Skillet Co

question 82

Multiple Choice

Pot Co. holds 90% of the common stock of Skillet Co. During 2021, Pot reported sales of $1,120,000 and cost of goods sold of $840,000. For this same period, Skillet had sales of $420,000 and cost of goods sold of $252,000.Included in the amounts for Pot's sales were Pot's sales for merchandise to Skillet for $140,000. There were no sales from Skillet to Pot. Intra-entity transfers had the same markup as sales to outsiders. Skillet had resold all of the intra-entity transfers (purchases) from Pot to outside parties during 2021. What are consolidated sales and cost of goods sold for 2021?

• A) $1,400,000 and $952,000.
• B) $1,400,000 and $1,092,000.
• C) $1,540,000 and $952,000.
• D) $1,400,000 and $1,232,000.
• E) $1,540,000 and $1,092,000.

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Definitions:

Achromatic Vision

A condition characterized by a limited ability to see colors, often referred to as color blindness.

Color Deficient

A condition where an individual has a reduced ability to see colors or differentiate between certain shades of colors, commonly referred to as color blindness.

Protanopia

A type of color blindness where there is a deficiency in seeing red colors.

Pituitary

A small endocrine gland attached to the base of the brain; the “master” gland.