When beginning and ending inventories include merchandise purchased from the gross profit on that merchandise treated in an affilated company, how is the seller's income distribution schedule? Deducted from income Deducted from income Added to income Added to income a. Added to income Deducted from income Added to income Deducted from income b. c. d. 33. Which of the following is false about intercompany transactions? a. Intercompany transactions have to be eliminated in the consolidation worksheet. b. Every year in the consolidation worksheet, we need to eliminate all intercompany sales of merchandise that occurred since the parent acquired the subsidiary (i.e., all intercompany sales in the current and prior years). c. The profit resulting from intercompany sales of merchandise is considered unrealized until the merchandise is sold to outsiders All of these statements are true. d. Which of the following is true about notes payable issued from a subsidiary to the parent company (i.e intercompany debt)? 34. In the consolidation worksheet, the note payable, note receivable, interest expense, and interest income related to intercompany debt must be eliminated. a. b. If the note is discounted at an outsider entity (e-g, bank), then the note payable and interest expense c. d. should be reported on the consolidated financial statements. All of these statements are true. None of these statements is true