P Company Regularly Sells Merchandise to Its 80%-Owned Subsidiary, S

question 11

Multiple Choice

P Company regularly sells merchandise to its 80%-owned subsidiary, S Corporation. In 2016, P sold merchandise that cost $240,000 to S for $300,000. Half of this merchandise remained in S's December 31, 2016 inventory. During 2017, P sold merchandise that cost $375,000 to S for $468,000. Forty percent of this merchandise inventory remained in S's December 31, 2017 inventory. Selected income statement information for the two affiliates for the year 2017 is as follows: Consolidated sales revenue for P and Subsidiary for 2017 are:

• A) $2,907,000.
• B) $3,000,000.
• C) $3,205,500.
• D) $3,375,000.

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Definitions:

Fraudulent Schemes

Illegal plans or operations intended to deceive or cheat individuals or organizations out of money or other benefits.

Brand Image

The perception or impression of a company or product held by the public, shaped by branding and marketing efforts.

Project Management

The practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals.

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