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Use the following information to compute CONSOLIDATED COST OF GOODS SOLD for the year ended 12/31/Year 2: Parent acquired 75% of Sub on January 1,

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Use the following information to compute CONSOLIDATED COST OF GOODS SOLD for the year ended 12/31/Year 2: Parent acquired 75% of Sub on January 1, Year 1. The book values of assets and liabilities approximated fair market values on the date of purchase (no over or under valued assets or liabilities). Parent has transferred Inventory to Sub as follows for the past two years: Year 1 Year 2 Transfer Price of Intercompany Sales $120.000 $150,000 Cost $ 86,400 102,000 Transfer price of merchandise still on hand at 12/31 $ 42,000 $37,500 At 12/31/Year 2. selected balances from the books of the two companies were as follows: Parent Sub Sales $500,000 $400,000 Cost of Goods Sold 275.000 235.000 Inventory 120.000 90.000

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