Use the Following Information to Answer the Question(s) Below

question 17

Multiple Choice

Use the following information to answer the question(s) below.

Paggle Corporation owns 80% of Spillway Inc.'s common stock that was purchased at its underlying book value. At the time of purchase, the book value and fair value of Spillway's net assets were equal. The two companies report the following information for 2014 and 2015.

During 2014, one company sold inventory to the other company for $50,000 which cost the transferor $40,000. As of the end of 2014, 30% of the inventory was unsold. In 2015, the remaining inventory was resold outside the consolidated entity.

-If the intercompany sale mentioned above was an upstream sale,what will be the reported amount of total consolidated sales revenue for 2015?

• A)$1,025,000
• B)$1,900,000
• C)$1,950,000
• D)$2,000,000

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Definitions:

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A beverage made by steeping dried leaves of the tea plant (Camellia sinensis) in hot water, known for its cultural and historical significance across the world.