Strickland Company Sells Inventory to Its Parent, Carter Company, at a Profit

question 82

Multiple Choice

Strickland Company sells inventory to its parent, Carter Company, at a profit during 2010. One-third of the inventory is sold by Carter in 2010. In the consolidation worksheet for 2010, which of the following choices would be a debit entry to eliminate unrealized intra-entity gross profit with regard to the 2010 intra-entity sales?

• A) Retained earnings.
• B) Cost of goods sold.
• C) Inventory.
• D) Investment in Strickland Company.
• E) Sales.

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Definitions:

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, generally defined as that which produces the greatest well-being of the greatest number of people.

Liberalism

An ideology that upholds the values of autonomy, approval by those governed, and impartiality in legal matters.

Libertarianism

The political philosophy according to which the government should punish crimes and enforce voluntary agreements but not redistribute income.

Income Redistribution

The reallocation of income across a society through taxation, monetary policies, and welfare systems.