Question
This question and the next are based on the following information. Paul and Sam (an 80% owned affiliate) reported the following income related accounts for
This question and the next are based on the following information. Paul and Sam (an 80% owned affiliate) reported the following income related accounts for year X1:
| Paul | Sam |
Revenue | $100,000 | $50,000 |
Cost of Sales | -$60,000 | -$30,000 |
Depreciation | -$20,000 | -$10,000 |
Income | $20,000 | $10,000 |
During year X1, Sam sold 100 inventory units to Paul for $50 each that cost Sam $30. As of 12/31/X1, Paul had managed to sell 50 of the units. How much income should be recognized by P?
Select one:
a. $150,000
b. $147,500
c. $140,000
This problem is based on the same information as the preceding problem. On their consolidated income statement, which of the following amounts of consolidated Cost of sales should be recognized in year X1?
Select one:
a. $90,000
b. $88,500
c. $87,500
d. $84,000
e. None of the Above
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