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Global Corporation acquired 85 percent of Local Company's voting shares of stock in 20X7. During 20X8, Global purchased 50,000 picture tubes for $15 each and
Global Corporation acquired 85 percent of Local Company's voting shares of stock in 20X7. During 20X8, Global purchased 50,000 picture tubes for $15 each and sold 28,000 of them to Local for $20 each. Local sold all of the units to unrelated entities prior to December 31, 20X8, for $30 each. Both companies use perpetual inventory systems. Which worksheet consolidating entry is needed in preparing consolidated financial statements for 20X8 to remove all effects of the intercompany sale?
A. | Sales | 560,000 | |
Cost of Goods Sold | 560,000 | ||
B. | Sales | 650,000 | |
Cost of Goods Sold | 650,000 | ||
C. | Cost of Goods Sold | 560,000 | |
Sales | 560,000 | ||
D. | Cost of Goods Sold | 650,000 | |
Sales | 650,000 |
Option A
Option B
Option C
Option D
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