Ch. 5 HW - Results Reporter Out of 15 questions you...

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Results Reporter Out of 15 questions, you answered 15 correctly with a final grade of 100% 15 correct (100%) 0 incorrect (0%) 0 unanswered (0%) Your Results: The correct answer for each question is indicated by a . 1 CORRECT Red Inc. owns 80% of White Company's outstanding common stock. Red reports cost of goods sold in the current year of $425,000 while White Co. reports $260,000. During the current year, Red Inc. sells inventory costing $125,000 to White Co. for $187,500. 60% of these goods are not resold by White Company until the following year. What is consolidated cost of goods sold ? A) $685,000 B) $497,500 C) $460,000 D) $535,000 E) $910,000 Feedback:
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2 CORRECT Maust Inc. owns 80% of Light Co.'s common stock. On January 2 of the current year, Maust sold Light some equipment for $200,000. The equipment had a carrying amount of $180,000. Light is depreciating the acquired equipment over a twenty-year remaining useful life by the straight-line method. The net adjustments to calculate consolidated net income for the current year and the following year would be an increase (decrease) of A) A B) B C) C D) D E) E Feedback: 3 CORRECT The following item is based on the following information.
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Presented below are several figures reported for Post Inc. and Mitchell Co. as of December 31 of the current year which was the second year of owning Mitchell. Two years ago, Post Inc. acquired 80% of Mitchell Co.'s outstanding common stock on January 1. The entire difference between the amount paid and the fair value of Mitchell's net assets is attributed to a previously unrecorded patent with a fair value of $112,500. The patent is being amortized over 20 years. During the first year, Mitchell sold Post inventory costing $60,000 for $70,000. 30% of this inventory was not sold to external parties until the following year. During the second year, Mitchell sold inventory costing $90,000 to Post for $115,000. Of this inventory, 25% remained unsold on December 31 of the second year. What is the amount of consolidated sales for the second year? A) $700,000 B) $815,000 C) $608,000 D) $585,000 E) $535,000 Feedback: 4 CORRECT The following item is based on the following information. Presented below are several figures reported for Post Inc. and Mitchell Co. as of December 31 of the current year which was the second year of owning Mitchell. Two years ago, Post Inc. acquired 80% of Mitchell Co.'s outstanding common stock on January 1. The entire difference between the amount paid and the fair value of Mitchell's net assets is attributed to a previously unrecorded patent with
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a fair value of $112,500. The patent is being amortized over 20 years. During the first year, Mitchell sold Post inventory costing $60,000 for $70,000. 30% of this inventory was not sold to external parties until the following year. During the second year, Mitchell sold inventory costing $90,000 to Post for $115,000. Of this inventory, 25% remained unsold on December 31 of the second year.
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This note was uploaded on 08/25/2011 for the course ACCT 440 taught by Professor Suresh during the Spring '11 term at Copenhagen Business School.

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Ch. 5 HW - Results Reporter Out of 15 questions you...

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