During the Year a Parent Makes Sales of Inventory at a Profit

question 13

Multiple Choice

During the year a parent makes sales of inventory at a profit to its 75 percent owned subsidiary.The subsidiary also makes sales of inventory at a profit to its parent during the same year.Both the parent and the subsidiary have on hand at the end of the year 20 percent of the inventory acquired from one another.Consolidated revenues for the year should exclude:

• A)80 percent of the total revenues from intercompany sales.
• B)total revenues from intercompany sales.
• C)only the revenues from the subsidiary's intercompany sales.
• D)only the revenues from the parent's intercompany sales.

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Definitions:

Structured Knowledge

Organized and systematic information arranged in a way that facilitates learning, understanding, and application.

Self-Esteem

A person's personal assessment of their own value or skills.

Scapegoating

the practice of singling out one person or group for blame or negative outcomes, often diverting attention from the real causes.

Outgroup

A social group to which an individual does not identify or belong, often perceived as fundamentally different or distinct from one's in-group.