Patti Company Owns 80% of the Common Stock of Shannon

question 112

Multiple Choice

Patti Company owns 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of $10,000,000 and cost of goods sold of $7,500,000. For the same period, Shannon has sales of $200,000 and cost of goods sold of $160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on the normal markup. At the end of the year, Shannon still possesses 30 percent of this inventory.Compute consolidated sales.

• A) $10,000,000.
• B) $10,126,000.
• C) $10,140,000.
• D) $10,200,000.
• E) $10,260,000.

Identify and analyze the advantages and disadvantages of direct investment.

Distinguish between licensing, franchising, and joint ventures.

Recognize strategies for matching products and promotional efforts to global markets.

Understand the commitment levels required by different market entry strategies.

---

Definitions:

Parallel Circuit

An electrical circuit in which the same voltage is applied across all components, with each component directly connected to the voltage source.

Inductive Reactance

The opposition that inductance presents to alternating current, depending on the frequency of the current and the inductance value, measured in ohms.

Total Current

The complete or aggregate current flowing through a circuit, taking into account all phases and pathways.

Parallel Circuit

An electrical circuit where components are connected across common points or junctions, providing multiple paths for current.