Edgar Co. acquired 60% of Stendall Co. on January 1, 2018. During 2018, Edgar made several sales of inventory to Stendall.The cost and sales price of the goods were $140,000 and $200,000, respectively.Stendall still owned one-fourth of the goods at the end of 2018.Consolidated cost of goods sold for 2018 was $2,140,000 due to a consolidating adjustment for intra-entity transfers less intra-entity gross profit in Stendall'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 Stendall to Edgar?

Multiple Choice

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