Question
1. Parent owned 80% of Sub. In Year 1, Parent sold a trademark with a book value of $400,000 to Sub. The selling price was
1. Parent owned 80% of Sub. In Year 1, Parent sold a trademark with a book value of $400,000 to Sub. The selling price was $700,000. The trademark has an indefinite useful life Sub sells the trademark in Year 3for $1,000,000 in cash. In Year 3, the gain on sale in consolidated net income should be:
$300,000 | ||
$440,000 | ||
$600,000 | ||
$680.000 |
2.Giant owns 100% of Small. At the start of the year, there were no items from intercompany sales in either companys inventory. During the year, Small sold goods to Giant for $5,000,000 that cost Small $4,000,000. Giant still owned 30% of the goods at the end of the year. Cost of goods sold was $23,000,000 for Giant and $7,000,000 for Small. What was consolidated cost of goods sold?
$25,000,000 | ||
$25,300,000. | ||
$26,000,000. | ||
$30,000,000. |
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