Premier Company owns 90 percent of the voting shares of Stanton, Inc. Premier reports sales of $480,000
Question:
Premier Company owns 90 percent of the voting shares of Stanton, Inc. Premier reports sales of $480,000 during the current year, and Stanton reports $264,000. Stanton sold inventory costing $28,800 to Premier (upstream) during the year for $57,600. Of this amount, 25 percent is still in ending inventory at year-end. Total receivables on the consolidated balance sheet were $81,800 at the first of the year and $119,100 at year-end. No intra-entity debt existed at the beginning or end of the year. Using the direct method, what is the consolidated amount of cash collected by the business combination from its customers?
a. $706,700
b. $649,100
c. $686,400
d. $744,000
Step by Step Answer:
B Parents reported sales 480000 Subsidiarys reported sales 264000 ...View the full answer
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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This video explains the basic understanding of a group. The term control is acquired when a parent company acquires more than 50% voting rights of subsidiaries. We have covered the basic structure of the consolidated balance sheet, with multiple scenarios of 100% and partial acquisitions at the start and during an accounting period. Also, goodwill and Non-controlling interest are covered in detail
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