Companies A,B and C Are All Part of the One

question 32

Multiple Choice

Companies A,B and C are all part of the one economic entity,but are all separate legal entities required to prepare their own financial statements.Company A sold Company B inventory that cost $56,000 for $78,000.At the end of the same period Company B has three-quarters of that inventory still on hand and the rest has been sold to an entity outside the economic group.At what amount should the inventory remaining in Company B be recorded in the consolidated statements?

• A) $14 625
• B) $56,000
• C) $58 500
• D) $42,000
• E) None of the given answers.

---

Definitions:

Inanimate "Substitute" Mothers

A term referring to surrogate non-living objects used to provide comfort or fulfill the role of a mother in animal behavior studies.

Terry Cloth

A fabric with loops that can absorb large amounts of water; commonly used for towels and bathrobes.

Wire

A slender, flexible strand or rod of metal used to bear mechanical loads or electricity and telecommunication signals.

Biological Drives

Innate impulses in living organisms that contribute to their survival, such as hunger, thirst, and the instinct for reproduction.