Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pristine Corporation owns 80% of Serendipity Inc.s common stock. During 2008, Pristine sold Serendipity $250,000 of inventory on the same terms as sales made to
Pristine Corporation owns 80% of Serendipity Inc.s common stock. During 2008, Pristine sold Serendipity $250,000 of inventory on the same terms as sales made to third parties. Serendipity sold all the inventory purchased from Pristine in 2008. The following data pertain to sales by each company for the year:
| Pristine | Serendipity | |
| Sales | $1,000,000 | $700,000 |
| Cost of goods sold | 400,000 | 350,000 |
How much should be reported as cost of goods sold in the consolidated income statement for 2008?
| A. $750,000 |
| B. $680,000 |
| C. $400,000 |
| D. $500,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started