Question
Morneau Company, a 100% owned subsidiary of Robertson Corporation, sells inventory to Robertson at a 30% profit on selling price. The following data are available
Morneau Company, a 100% owned subsidiary of Robertson Corporation, sells inventory to Robertson at a 30% profit on selling price. The following data are available pertaining to inter-company purchases by Robertson:
Inter-company sales
2014: $17,600
2015: $24,300
2016: $27,000
Unsold at year end (based on selling price)
2014: $3,200
2015: $5,700
2016: $4,800
Morneaus profit numbers were $113,000, $204,000 and $225,600 for 2016, 2017, and 2018, respectively. Robertson received dividends from Morneau of $21,000 for 2016 and 2017, and $25,000 for 2018.
1. What would be the net debit or credit to cost of goods sold on the 2017 consolidation worksheet?
a. $24,300 credit
b. $23,550 credit
c. $25,050 credit
d. $ 750debit
2.Assume Morneau uses the cost method to account for its investment in Robertson. Compute the
amount of beginning of year [ADJ] adjustment necessary for consolidation for the year ended December 31, 2017. a. $112,040 b. $ 92,000
c. $113,000
d. $ 91,040
3.Assume Morneau uses the cost method to account for its investment in Robertson. Compute the
amount of beginning of year [ADJ] adjustment necessary for consolidation for the year ended December 31, 2018. a. $294,290 b. $296,000
c. $275,000
d. $273,290
Please help show the calculation the answer on the Bold letter please in detail. Thank you
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