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

question 33

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 2011 and 2012.
During 2011,one company sold inventory to the other company for $50,000 which cost the transferor $40,000.As of the end of 2011,30% of the inventory was unsold.In 2012,the remaining inventory was resold outside the consolidated entity.

-If the sale referred to above was a downstream sale,the total sales revenue reported in the consolidated income statement for 2011 would be

• A)$870,000.
• B)$880,000.
• C)$920,000.
• D)$970,000.

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Definitions:

Intensity

The degree of strength, force, energy, or feeling in a given situation or with respect to a particular attribute.

Wavelength

The distance between successive peaks of a wave, typically used in the context of electromagnetic waves.

Hue

A color or shade in the spectrum, representing the type of light reflected from an object.

Perceptual Constancy

The brain's ability to recognize objects as remaining the same despite changes in distance, viewpoint, or lighting conditions.