Eagle Play Sets Estimates a 60% Probability That Sales of Play

question 20

Multiple Choice

Eagle Play sets estimates a 60% probability that sales of play sets in the summer of 2019 will be 45,000 units, about the same as in 2018.They believe there is a 20% probability that they will be more popular due to its new exclusive line, and potential sales would be 90,000 units.There is also a 20% probability that restrictive zoning ordinances will limit sales to 30,000 units.The expected unit sales of the play sets are

• A)55,000
• B)51,000
• C)67,500
• D)60,000

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Definitions:

Consolidated Cost Of Goods Sold

The aggregated cost of goods that have been used up in the production of goods or services sold by a company and its subsidiaries.

Year-end

The end of a fiscal year or calendar year, when companies close their books and summarize financial activities.

Eliminate Intra-entity Transfer

A consolidation procedure that removes transactions between entities within the same corporate group to avoid double counting in consolidated financial statements.

Equity Method

An accounting technique used to assess the profits earned by a company through its investment in another company, by reporting the income based on the investee's net income and changes in equity.