Question
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2015,
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2015, the companies had the following account balances: |
Akron | Toledo | |||||
Sales | $ | 1,100,000 | $ | 600,000 | ||
Cost of goods sold | 500,000 | 400,000 | ||||
Operating expenses | 400,000 | 220,000 | ||||
Investment income | Not given | 0 | ||||
Dividends declared | 80,000 | 30,000 | ||||
Intra-entity sales of $320,000 occurred during 2014 and again in 2015. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2014, with $50,000 unsold on December 31, 2015.
a.
b.
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