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

question 48

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 2009?

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

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Definitions:

Unitary Elasticity

A situation in which the percentage change in quantity demanded or supplied is equal to the percentage change in price.

Percentage Increase

A measurement that calculates the degree to which a value has risen compared to its previous value, expressed as a percentage.

Price Elasticity

Measures how much the quantity demanded of a good changes in response to a change in its price.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression.