Gargiulo Company, a 90% Owned Subsidiary of Posito Corporation, Sells

question 92

Multiple Choice

Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2010.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to cost of goods sold for the 2010 consolidation worksheet with regard to unrealized gross profit of the intra-entity transfer of merchandise?

• A) $300.
• B) $240.
• C) $2,000.
• D) $1,600.
• E) $270.

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Definitions:

Fibrillation

An irregular, often rapid heart rate that commonly causes poor blood flow to the body.

Arrhythmia

An irregularity in the heartbeat rhythm, which can range from minor to serious health concerns.

Fibrillation

An uncoordinated twitching of the muscle fibers, particularly noted in the heart muscle.

Palpitation

A sensation in which a person is aware of an irregular, hard, or rapid heartbeat.