Walsh Company Sells Inventory to Its Subsidiary, Fisher Company, at a Profit

question 14

Multiple Choice

Walsh Company sells inventory to its subsidiary, Fisher Company, at a profit during 2010. One-third of the inventory is sold by Walsh uses the equity method to account for its investment in Fisher. In the consolidation worksheet for 2010, which of the following choices would be a debit entry to eliminate the intra-entity transfer of inventory?

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

---

Definitions:

Marketing Effort

The combined activities and strategies used by a company to market its products or services and achieve its marketing objectives.

SWOT Analysis

A strategic planning tool that evaluates the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.

Luxury Motors

High-end automotive brands or vehicles that offer premium features, design, and performance, targeting a demographic that seeks exclusivity and prestige.

Upscale Auto Dealership

A dealership that specializes in selling luxury or high-end vehicles, often offering premium services and amenities to attract affluent customers.