Stevie Ltd Owns 75% of Wright Ltd

question 2

Multiple Choice

Stevie Ltd owns 75% of Wright Ltd.During the year ended 30 June 20X1 Stevie Ltd reported total sales of $10 000 000 and Wright Ltd reported total sales of $15 000 000.$2 000 000 of Stevie Ltd's sales were sales to Wright Ltd.Wright has sold all the assets from these sales from Stevie Ltd to external parties during this year.What is the total sales reported in the consolidated profit or loss account for this year?

• A)$23 000 000
• B)$25 000 000
• C)$17 250 000
• D)$18 750 000

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Definitions:

Treasury Stock

Shares that were once in circulation but were bought back by the issuing company, decreasing the amount of stock outstanding.

Par Common Stock

The nominal or face value assigned to a share of common stock by the company's corporate charter.

Fair Market

The price at which an asset would change hands between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts.

Total Assets

The total value of everything a company owns, encompassing both current assets and long-term assets.