On January 6, 2017, Parkson Co. purchased 90% ownership of Sad Co. Parkson purchased inventory for 60,000 and resold it to Sad for $90,000. On Sep 12, 2017, Sad sold 70% of the inventory to outsider companies for $100,000. 

1. What is the amount of consolidated inventory that would be reported for that year ended 2017?

A. $40,500 

C. $18,000 

B. $27,000 

D. $30,000 

2. In accounting for a business combination the Good well exists when: 

A. Purchase price book value. 

B. Fair value of net assets purchase price or the fair value of the consideration. 

C. Fair value of net assets purchase price or the fair value of the consideration. 

D. Fair value of net assets book value.

 3. Damak Co. owns 85% of the shares of Rotana Co. Damak Co. sold merchandise that c $300,000 to Rotna Co. for $330,000 and Rotana Co. sold 60% of the merchandise to customers for $325,000. The unrealized profits in ending inventory should be: 

A. $12,000 

B. $120,000 

C. $18,000 

D. $132,000

Answer rating: 100% (QA)

Quiz 1 Parksons share of inventory at the beginning of the year 60000 x 90 54000 Parksons purchase f... View the full answer