Elbonia Corporation,a 100 Percent Subsidiary of Atomic Corporation,caters to Its

question 14

Multiple Choice

Elbonia Corporation,a 100 percent subsidiary of Atomic Corporation,caters to its parent's entire inventory requirements.In 2007,Elbonia produced inventory at a cost of $36,000 and sold it to Atomic for $75,000.Atomic held all the items in inventory on January 1,2008.During 2008,Atomic sold all the units for $98,000.Assume that the companies had no other transactions during 2007 and 2008.
-Based on the preceding information,what amount would be reported in the consolidated financial statements for cost of goods sold for 2007?

• A)$39,000
• B)$36,000
• C)$75,000
• D)$0

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Definitions:

Land

The natural resource encompassing the earth's surface, not including water or buildings.

Agriculture Sales

The trading of products and services related to farming and other agricultural activities.

Industrial Capitalist

An individual or entity that invests in industries for profit through the ownership of physical goods and capital goods used in production.

19th Century

The period from January 1, 1801, to December 31, 1900, characterized by industrialization, colonial expansion, significant technological advancements, and various social changes.