Select the correct answer for each of the following questions Lorn Corporation purchased inventory from Dresser Corporation for $120,000 on September 20, 20X1, and resold 80 percent of the inventory to unaffiliated companies prior to December 31, 20X1, for $140,000 Dresser produced the inventory so...

1 c The only sales recorded are sales to nonaffiliates 2 a Amount ...

Select the correct answer for each of the following questions. Lorn Corporation purchased inventory from Dresser Corporation

Question:

Select the correct answer for each of the following questions.
Lorn purchased inventory from Dresser for $120,000 on September 20, 20X1, and resold 80 percent of the inventory to unaffiliated companies prior to December 31, 20X1, for $140,000. Dresser produced the inventory sold to Lorn for $75,000. Lorn owns 70 percent of Dresser’s voting common stock. The companies had no other transactions during 20X1.
1. What amount of sales will be reported in the 20X1 ?
a. $98,000.
b. $120,000.
c. $140,000.
d. $260,000.
2. What amount of cost of goods sold will be reported in the 20X1 ?
a. $60,000.
b. $75,000.
c. $96,000.
d. $120,000.
e. $171,000.
3. What amount of consolidated net income will be assigned to the controlling interest for 20X1?
a. $20,000.
b. $30,800.
c. $44,000.
d. $45,000.
e. $69,200.
f. $80,000.
4. What inventory balance will be reported by the consolidated entity on December 31, 20X1?
a. $15,000.
b. $16,800.
c. $24,000.
d. $39,000.

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