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

question 46

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 sales must be eliminated from the consolidated income statement for 20X8?

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

Recognize behavioral contagion in groups, exemplified by the "bad apple" effect.

Comprehend how group decisions can suffer from limited information and lack of optimal leadership.

Identify the psychological dynamics involved in conforming to group norms or decisions under pressure.

Identify the non-oil related corporation with sales over $200 billion in 2008.

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Definitions:

Compensatory Damages

Monetary compensation awarded to reimburse a plaintiff for actual losses suffered due to a defendant's wrongdoing.

Punitive Damages

Financial compensation awarded to a plaintiff to punish the defendant for egregious misconduct and deter future similar acts.

Mitigate Damages

A legal principle requiring a party suffering loss to take reasonable action to minimize the extent of the damage resulting from a breach of contract or tort.

Consequential Damages

Refers to damages that are not directly caused by a breach of contract but result from the particular circumstances of the plaintiff.