Given the Following Separate Company Balance Sheets and Income Statements

question 97

Short Answer

Given the following separate company balance sheets and income statements, answer the following questions.

Additional information:
Plea acquired its investment in the stock of Settle on the date of Settle’s incorporation.
Consolidated accounts receivable is $80,000.
Consolidated sales total $900,000.
No purchases from Settle remain in Plea’s ending inventory.

Required:

a. What percentage of Settle does Plea appear to own?
b. What is beginning retained earnings of Plea?
c. How much was Plea’s initial investment in Settle?
d. What is the amount of intercompany accounts receivable?
e. What is consolidated cost of goods sold?

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Definitions:

Awareness

The state or ability to perceive, feel, or be conscious of events, objects, or sensory patterns.

Stereotypic Thinking

A type of thinking where individuals assign a fixed, oversimplified set of characteristics to a group without allowing for individual variance or complexity.

Alcohol

An organic compound that is the intoxicating ingredient found in beer, wine, and spirits, affecting the central nervous system.

Prejudiced

Holding preconceived opinions or judgments without sufficient knowledge or examination.