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

question 35

Multiple Choice

Strickland Company sells inventory to its parent, Carter Company, at a profit during 2010. One-third of the inventory is sold by Carter in 2010.
-In the consolidation worksheet for 2010, which of the following choices would be a credit entry to eliminate unrealized intra-entity gross profit with regard to the 2010 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:

Fevers

An increase in body temperature above the normal range, often a sign of infection or illness, reflecting the body's immune response.

Fahrenheit

A temperature scale on which water freezes at 32 degrees and boils at 212 degrees under standard conditions.

Freezing

The process of turning a liquid into a solid by lowering its temperature below its freezing point.

Fahrenheit

A temperature scale in which water freezes at 32 degrees and boils at 212 degrees under standard atmospheric pressure, commonly used in the United States.