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

question 5

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 credit 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:

Air

The invisible gaseous substance surrounding the earth, a mixture mainly of oxygen and nitrogen.

Blood Vessels

Cylindrical formations responsible for transporting blood all over the body, encompassing arteries, veins, and capillaries.

Pivot Joint

A pivot joint is a type of synovial joint that allows for rotational movement around a single axis, found in the neck and forearm.

Rotation

The act or process of spinning around an axis or center point.