When intercompany sales are eliminated during consolidation, why is cost of sales reduced by the amount of intercompany sales?
Answer to relevant QuestionsHow does the process of consolidation differ when the parent company has used the equity method of recording its investment in a subsidiary, as compared to consolidation when the cost method of recording has been used?Multi- Corporation has been following a growth and diversification strategy for the past two years. To accomplish this goal, it has been making a series of strategic investments. This growth has been financed through the ...Harry Inc., a publicly traded company, purchased 1,000 shares, constituting a 40% owner-ship interest, in Sally Inc. on January 1, 20X1 for $ 150,000. Harry Inc.’s income under the cost basis for 20X1 is $ 80,000. ...What are the disadvantages for the acquirer of obtaining control by a purchase of shares?Why is a reverse takeover often immediately followed by a name change of the legal parent corporation?
Post your question