1)Poe Co. acquired 60% of Snoke Co. on January 1, 2017. During 2017, Poe made several sales of inventory to Snoke. The cost and selling price of the goods were $140,000 and $200,000, respectively. Snoke still owned one-fourth of the goods at the end of 2017. Consolidated cost of goods sold for 2017 was $2,140,000 because of a consolidating adjustment for intra-entity sales less the entire profit remaining in Snoke's ending inventory.

How would consolidated cost of goods sold have differed if the inventory transfers had been for the same amount and cost, but from Snoke to Poe?

A. Consolidated cost of goods sold would have remained $2,140,000. B. Consolidated cost of goods sold would have been more than $2,140,000 because of the controlling interest in the subsidiary. C. Consolidated cost of goods sold would have been less than $2,140,000 because of the noncontrolling interest in the subsidiary. D. Consolidated cost of goods sold would have been more than $2,140,000 because of the noncontrolling interest in the subsidiary. E. The effect on consolidated cost of goods sold cannot be predicted from the information provided.

2)Poe Company sells inventory to its subsidiary, Solo Company, at a profit during 2017. One-third of the inventory is sold by Poe uses the equity method to account for its investment in Solo. In the consolidation worksheet for 2017, which of the following choices would be a credit entry to eliminate unrealized intra-entity gross profit with regard to the 2017 intra-entity sales? A. Retained earnings. B. Cost of goods sold. C. Inventory. D. Investment in Solo Company. E. Sales.

3)Which of the following statements is true regarding an intra-entity sale of land?

A. A loss is always recognized but a gain is eliminated in a consolidated income statement. B. A loss and a gain are always eliminated in a consolidated income statement. C. A loss and a gain are always recognized in a consolidated income statement. D. A gain is always recognized but a loss is eliminated in a consolidated income statement. E. A gain or loss is eliminated by adjusting stockholders' equity through comprehensive income.