Business, 13.11.2019 02:31 itzzzabbi

Parker corporation owns 80 percent of smith inc.’s common stock. during 20x1, parker sold inventory to smith for $250,000 on the same terms as sales made to third parties. smith sold all of the inventory purchased from parker in 20x1. the following information pertains to smith’s and parker’s sales for 20x1: :

parker:
sales $ 1,000,000
cost of sales 400,000
total $ 600,000

smith:
sales $ 700,000
cost of sales $ 350,000
total $ 350,000

what amount should parker report as cost of sales in its year 20x1 consolidated income statement?

(a) $750,000
(b) $680,000
(c) $500,000
(d) $430,000

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Parker corporation owns 80 percent of smith inc.’s common stock. during 20x1, parker sold inventory...

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