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

question 112

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 debit entry to eliminate the intra-entity transfer of inventory?

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

Understand the concept of economic costs including explicit and implicit costs.

Calculate economic profit and distinguish it from accounting profit.

Identify the components of total revenue and total cost to determine profit.

Understand opportunity costs and how they influence business decisions.

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Definitions:

Heterosexual Orientation

An orientation involving romantic or sexual feelings towards members of the opposite sex.

Physical Attractiveness

The degree to which a person's physical traits are considered aesthetically pleasing or beautiful.

Ovulation

The phase in the menstrual cycle where an ovary releases an egg, making it available for fertilization.

Masculine

Traits or qualities traditionally associated with men and male behavior.