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REFERENCE: Ref.06_02 Stoop Co.owned 80% of the Common Stock of Knight Co.Knight

question 31

Multiple Choice

REFERENCE: Ref.06_02
Stoop Co.owned 80% of the common stock of Knight Co.Knight had 50,000 shares of $5 par value common stock and 2,000 shares of preferred stock outstanding.Each preferred share received an annual per share dividend of $10 and is convertible into four shares of common stock.Stoop did not own any of Knight's preferred stock.Knight also had 600 bonds outstanding,each of which is convertible into ten shares of common stock.Knight's annual after-tax interest expense for the bonds was $22,000.Stoop did not own any of Knight's bonds.Knight reported income of $300,000 for 2009.
-Cadion Co.owned control over Knieval Inc.Cadion reported sales of $420,000 during 2009 while Knieval reported $280,000.Inventory costing $28,000 was transferred from Knieval to Cadion (upstream) during the year for $56,000.Of this amount,twenty-five percent was still in ending inventory at year's end.Total receivables on the consolidated balance sheet were $112,000 at the first of the year and $154,000 at year-end.No intercompany debt existed at the beginning or ending of the year.Using the direct approach,what is the consolidated amount of cash collected by the business combination from its customers?

Definitions:

Ductus Deferens

A tube that carries sperm from the epididymis to the ejaculatory ducts in the male reproductive system.

Seminiferous Tubule

Narrow, coiled tubules within the testes where spermatozoa are produced.

Placenta

An organ that develops in the uterus during pregnancy, providing oxygen and nutrients to and removing waste from the fetus.

Fetal Blood Cell Production

The process by which blood cells are produced in the fetus, primarily taking place in the liver and spleen before birth.