Question
ABC, Inc owns 100% of XYZ, Inc. The only transactions that took place for the period were between ABC and XYZ. XYZ had $150,000 in
ABC, Inc owns 100% of XYZ, Inc. The only transactions that took place for the period were between ABC and XYZ. XYZ had $150,000 in inventory that they sold on credit to ABC for $200,000. ABC sold all of its inventory to external customers for $250,000. At the end of the reporting period, ABC had not yet paid XYZ for the purchase. If these were the only transactions for the companies during the period, what are the dollar amounts the consolidated statements would show at the end of the period for 1) Inventory, 2) Sales, 3) COGS, 4) Gross Profit, 5) Accounts Receivable, 6) Accounts Payable.
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