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

question 37

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 should be reported in the December 31,20X8,consolidated balance sheet as inventory?

• A)$36,000
• B)$12,000
• C)$15,000
• D)$28,000

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Definitions:

Governmental Fund Financial Statements

Financial reports that show the financial position and results of operations of governmental entities, focusing on how money flows into and out of funds.

General Fund

The primary operating fund of a government, covering all financial resources except those required to be accounted for in another fund.

Tax Levy Revenues

Income received by governments from taxing individuals or entities, often used to fund public services.

Bond Proceeds

The funds received by an issuer from the sale of bonds, typically used for financing long-term investments.