REFERENCE: Ref.05_03 Strickland Company Sells Inventory to Its Parent,Carter Company,at a Profit

question 84

Multiple Choice

REFERENCE: Ref.05_03
Strickland Company sells inventory to its parent,Carter Company,at a profit during 2009.Select the correct answer.
-With regard to the intercompany sale,which of the following choices would be a credit entry in the consolidated worksheet for 2010?

• A)Retained earnings.
• B)Cost of goods sold.
• C)Inventory.
• D)Investment Strickland Company.
• E)Additional paid-in capital.

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Definitions:

Investors Rate of Return

The percentage of profit or loss made on an investment over a specific period, measuring the efficiency of an investment.

Appropriate Discount Rate

The interest rate used to discount future cash flows of an investment, reflecting the risk level and the time value of money.

Annual Dividend

The total dividend payment a company distributes to its shareholders for the year, often cited as a per share amount.

Dividends Increase

This is when a company decides to increase the amount of money distributed to its shareholders from its earnings.