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

question 39

Multiple Choice

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

Pouch Corporation acquired an 80% interest in Shenley Corporation on January 1, 2014, when the book values of Shenley's assets and liabilities were equal to their fair values. The cost of the 80% interest was equal to 80% of the book value of Shenley's net assets. During 2014, Pouch sold merchandise that cost $70,000 to Shenley for $86,000. On December 31, 2014, three-fourths of the merchandise acquired from Pouch remained in Shenley's inventory. Separate incomes (investment income not included) of the two companies are as follows:


-The consolidated income statement for Pouch Corporation and subsidiary for the year ended December 31,2014 will show consolidated cost of sales of

• A)$120,000.
• B)$136,000.
• C)$148,000.
• D)$210,000.

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Definitions:

Desert Organisms

Plants and animals specifically adapted to survive in harsh desert environments.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to release stored energy through the oxidation of acetyl-CoA derived from carbohydrates, fats, and proteins into carbon dioxide and chemical energy.

Electron Transport Chain

A series of protein complexes embedded in the mitochondrial or cellular membrane that facilitates the transfer of electrons, generating a proton gradient used to produce ATP.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance that is the main constituent of Earth's streams, lakes, and oceans, and the fluids of most living organisms.