A parent owns 80% of its subsidiary’s voting stock. At the end of the year, the subsidiary’s ending inventory
A parent owns 80% of its subsidiary’s voting stock. At the end of the year, the subsidiary’s ending inventory includes $15,000 in unconfirmed profit on merchandise purchased from the parent. The subsidiary’s beginning inventory included unconfirmed profit of $10,000 on merchandise purchased from the parent. The parent’s ending inventory includes $40,000 in unconfirmed profit on merchandise purchased from the subsidiary. The parent’s beginning inventory included $35,000 in unconfirmed profit on merchandise purchased from the subsidiary. Consolidation eliminating entries (I) related to this information include a credit to inventory in the amount of
Select one:
a. $55,000
b. $45,000
c. $44,000
d. $36,000
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