Parent Corporation Owns 90 Percent of Subsidiary 1 Company's Stock

question 31

Multiple Choice

Parent Corporation owns 90 percent of Subsidiary 1 Company's stock and 75 percent of Subsidiary 2 Company's stock.During 2008,Parent sold inventory purchased in 2007 for $48,000 to Subsidiary 1 for $60,000.Subsidiary 1 then sold the inventory at its cost of $60,000 to Subsidiary 2.Prior to December 31,2008,Subsidiary 2 sold $45,000 of inventory to a nonaffiliate for $67,000 and held $15,000 in inventory at December 31,2008.
-Based on the information given above,what amount of inventory must be eliminated from the consolidated balance sheet for 2008?

• A)$2,400
• B)$9,000
• C)$12,000
• D)$3,000

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Definitions:

Ounces

A unit of weight in the avoirdupois system, equivalent to 1/16th of a pound or approximately 28.35 grams.

Convert

To change something into a different form or property, often referring to religious belief, energy forms, or data formats.

Ceclor

An antibiotic medication used to treat various bacterial infections by stopping the growth of bacteria.

Oral Suspension

A liquid mixture in which a solid substance is suspended, often used in medication for easier consumption.