Strickland Company Sells Inventory to Its Parent, Carter Company, at a Profit

question 79

Multiple Choice

Strickland Company sells inventory to its parent, Carter Company, at a profit during 2020. Carter sells one-third of the inventory in 2020.In the consolidation worksheet for 2020, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory?

• A) Retained earnings.
• B) Cost of goods sold.
• C) Inventory.
• D) Investment in Strickland Company.
• E) Sales.

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Definitions:

The States

Colloquially refers to the United States of America or, in a broader sense, to the individual states that constitute the federal union.

ERISA

The Employee Retirement Income Security Act, a federal law that sets minimum standards for pension plans in private industry to protect individuals in these plans.

Pension Fund Managers

Professionals responsible for overseeing the investment and allocation of funds collected in a pension scheme to ensure that there are enough resources to pay pension benefits in the future.

Employee Horseplay

Unprofessional and risky behavior by employees during work hours, potentially leading to accidents or injuries.