During the Year a Parent Makes Sales of Inventory at a Profit

question 13

Multiple Choice

During the year a parent makes sales of inventory at a profit to its 75 percent owned subsidiary.The subsidiary also makes sales of inventory at a profit to its parent during the same year.Both the parent and the subsidiary have on hand at the end of the year 20 percent of the inventory acquired from one another.Consolidated revenues for the year should exclude:

• A)80 percent of the total revenues from intercompany sales.
• B)total revenues from intercompany sales.
• C)only the revenues from the subsidiary's intercompany sales.
• D)only the revenues from the parent's intercompany sales.

---

Definitions:

Plantations

Large farms in tropical or subtropical climates that specialize in the mass production of a single crop or product.

Southern Slaves

Individuals held in bondage in the Southern United States, forced to work without pay, primarily in agriculture, until emancipation in the 19th century.

Gullah

An African American community living on the Sea Islands and in the coastal region of the Southern United States, known for preserving more of their African linguistic and cultural heritage than any other African American community.

Freed Slaves

Individuals who were emancipated from slavery, particularly in the United States following the Civil War and the Emancipation Proclamation.