REFERENCE: Ref.05_04 Walsh Company Sells Inventory to Its Subsidiary,Fisher Company,at a Profit

question 31

Multiple Choice

REFERENCE: Ref.05_04
Walsh Company sells inventory to its subsidiary,Fisher Company,at a profit during 2009.Walsh uses the equity method to account for its investment in Fisher.
-With regard to the intercompany sale,which of the following choices would be a debit entry in the consolidated worksheet for 2010?

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

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Definitions:

Merging Organizations

The process of combining two or more organizations into one, to achieve strategic objectives or enhance competitive advantage.

Organizational Culture

The underlying values, beliefs, and practices that characterize an organization and influence its members' behavior.

Business Ethics

Principles and standards that guide behavior in the world of business, focusing on fairness, transparency, and integrity.

Ethical Values

The principles that guide behavior in terms of the distinction between right and wrong, often forming the foundation of decision-making in a personal or organizational context.