Walsh Company Sells Inventory to Its Subsidiary, Fisher Company, at a Profit

question 51

Multiple Choice

Walsh Company sells inventory to its subsidiary, Fisher Company, at a profit during 2020. With respect to one-third of the inventory sold to Fisher, Walsh accounts for it using the equity method of accounting.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 Fisher Company.
• E) Sales.

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Definitions:

Proximity

Physical nearness to another that promotes communication and thus attraction.

Expressed Need

entails a clearly communicated or articulated requirement or necessity by an individual.

Young Adulthood

This term refers to a life stage between adolescence and full-fledged adulthood, often defined by ages 20 to 40, where individuals make significant life decisions regarding careers, relationships, and personal identity.

Increased Intimacy

The deepening of emotional closeness and connection in a relationship, often through acts of self-disclosure and empathy.