Parent Corporation Owns 90 Percent of Subsidiary 1 Company's Stock

question 30

Multiple Choice

Parent Corporation owns 90 percent of Subsidiary 1 Company's stock and 75 percent of Subsidiary 2 Company's stock.During 20X8,Parent sold inventory purchased in 20X7 for $48,000 to Subsidiary 1 for $60,000.Subsidiary 1 then sold the inventory at its cost of $60,000 to Subsidiary 2.Prior to December 31,20X8,Subsidiary 2 sold $45,000 of inventory to a nonaffiliate for $67,000 and held $15,000 in inventory at December 31,20X8.
-Based on the information given above,what amount of cost of goods sold must be eliminated from the consolidated income statement for 20X8?

• A)$117,000
• B)$120,000
• C)$150,000
• D)$128,000

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Definitions:

Title

A legal term referring to the ownership of property, implying a right to the use and possession of that property.

Cadillac

A luxury vehicle brand produced by General Motors, known for its high level of craftsmanship and advanced features.

Recover

The process of gaining back or securing compensation or restitution for a loss, harm, or debt.

Lost Property

Items that are misplaced or forgotten by the owner without intention to abandon ownership.