REFERENCE: Ref.05_10 Stark Company,a 90% Owned Subsidiary of Parker,Inc. ,Sold Land to Land

question 50

Multiple Choice

REFERENCE: Ref.05_10
Stark Company,a 90% owned subsidiary of Parker,Inc. ,sold land to Parker on May 1,2009,for $80,000.the land originally cost Stark $85,000.Stark reported net income of $200,000,$180,000,and $220,000 for 2009,2010,and 2011,respectively.Parker sold the land it purchased from Stark in 2009 for $92,000 in 2011.
-Which of the following will be included in a consolidation entry for 2010?

• A)Debit retained earnings for $5,000.
• B)Credit retained earnings for $5,000.
• C)Debit investment in subsidiary for $5,000.
• D)Credit investment in subsidiary for $5,000.
• E)Credit land for $5,000.

---

Definitions:

Cost of Goods Manufactured

This represents the total production cost of goods that are finished and available for sale during a specific accounting period, including materials, labor, and overhead.

Work in Process

Goods that are in the production process but are not yet finished, representing partially completed products.

Finished Goods

Items that have finished the production process and are available for purchase.

Overhead Applied

The allocation of overhead costs to specific jobs or cost objects based on a predetermined overhead rate, helping in accurately costing products or services.