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

question 124

Multiple Choice

Strickland Company sells inventory to its parent, Carter Company, at a profit during 2012. One-third of the inventory is sold by Carter in 2012.
In the consolidation worksheet for 2012, which of the following choices would be a debit entry to eliminate unrealized intra-entity gross profit with regard to the 2012 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:

Aggressive

Behavior characterized by hostility, assertiveness, and often the intent to harm or assert dominance over others.

Peers

Individuals who are equals within a specific context, such as age, grade, or status, often influencing social and psychological behavior.

Daycare

A service that provides care and educational activities for children when their parents or guardians are unavailable during the day.

Nutrition

The process of providing or obtaining the food necessary for health and growth.