Consolidated Amounts Large Company owns all of the common stock of Small Company. Income statements for the companies for 2001 contained the following amounts:

During 2001, Small Company purchased inventory for $10,000 and immediately sold it to Large Company at cost.
In the consolidated income statement for 2001:
What amount will be reported as sales revenue?
What amount will be reported as cost of goods sold?
. What amount will be reported as income from subsidiary?
What amount will be reported as operating expenses?
Why are some amounts reported in the consolidated income statement not equal to the sum of the amounts from the statements of the parent and subsidiary?
onop

Transcribed Image Text:

Large Co. Sales Revenue $600,000 Small Co. $300,000 Cost of Goods Sold (400,000) (160,000) Gross Profit $200,000 $140,000 Income from Subsidiary 90,000 Operating Expenses (130,000) (50,000) Net Income $160,000 $ 90,000