The Following Information Is Provided for Nguyen Company and Northwest

question 30

Multiple Choice

The following information is provided for Nguyen Company and Northwest Corporation. $$\begin{array} { l c c } { \text { (in } \$ \text { millions) } } & \text { Nquyen Company } & \text { Northwest Corporation } \\\hline \text { Net income } 2022 & \$ 165 & \$ 420 \\\text { Net sales } 2022 & 1,650 & 4,900 \\\text { Total assets } 12 / 31 / 20 & 1,000 & 2,400 \\\text { Total assets } 12 / 31 / 21 & 1,050 & 3,000 \\\text { Total assets } 12 / 31 / 22 & 1,150 & 4,000\end{array}$$ If Nguyen and Northwest are in the same industry and the industry average for return on assets is equal to 30% which of the following statements is true?

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Definitions:

Inventory

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Consolidated Income Tax Return

A single income tax return filed by a parent company and its subsidiaries, considered as one entity for tax purposes.

Intra-entity Transfers

Transfers of goods, services, or assets between divisions or units within the same company.

Voting Stock

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.