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

question 52

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 2013, assuming Carter uses the initial value methd of accounting for its investment in Strickland, which of the following choices would be a credit 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.

---

Definitions:

Unconditional Positive Regard

A concept in client-centered therapy proposing that the therapist accepts and supports the client regardless of what they say or do, facilitating a trusting relationship.

Behavior Modification

A therapeutic approach that seeks to alter human behavior through systematic reinforcement or punishment mechanisms.

Operant Conditioning Principles

A method of learning that employs rewards and punishments for behavior. It encourages the recurrence of a behavior with a positive reinforce or decreases it by negative reinforce.

Unconditional Positive Regard

A concept in psychology that refers to accepting and supporting a person regardless of what they say or do, especially in a therapist-client relationship.