Perth Corporation owns 90 percent of Sydney Company's stock. At the end of 20X8, Perth and Sydney
Question:
Perth Corporation owns 90 percent of Sydney Company's stock. At the end of 20X8, Perth and Sydney reported the following partial operating results and inventory balances:
| Perth Corporation | Sydney Company |
| ||||
Total sales | $ | 500,000 |
| $ | 350,000 |
| |
Sales to Sydney Company |
| 100,000 |
|
|
|
| |
Sales to Perth Corporation |
|
|
|
| 150,000 |
| |
Net income |
|
|
|
| 15,000 |
| |
Operating income (excluding investment income from Sydney) |
| 56,000 |
|
|
|
| |
Inventory on hand, December 31, 20X8, purchased from: |
|
|
|
|
|
| |
Sydney Company |
| 36,000 |
|
|
|
| |
Perth Corporation |
|
|
|
| 31,000 |
| |
Perth regularly prices its products at cost plus a 30 percent markup for profit. Sydney prices its sales at cost plus a 10percent markup. The total sales reported by Perth and Sydney include both intercompany sales and sales to nonaffiliates.
8) Based on the information given above, what amount of sales will be reported in the consolidated income statement for 20X8?
A) $500,000
B) $850,000
C) $600,000
D) $800,000
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith