Top company holds 90 percent of bottom company’s common stock. in the current year, top reports sales of $800,000 and cost of goods sold of $600,000. for this same period, bottom has sales of $300,000 and cost of goods sold of $180,000. during the current year, bottom sold merchandise to top for $100,000. the parent still possesses 40 percent of this inventory at the current year-end. bottom had established the transfer price based on its normal gross profit rate. what are the consolidated sales and cost of goods sold?

690,000

Step-by-step explanation:

given,                        

sale of the company = $800,000              

cost of the good sold = $600,000            

percentage = \dfrac{800000-600000}{800000}

                   = 25%                          

unrealized gross profit = $100000

                        = ( $100000× 0.40 ) × 0.25

                        = $ 10,000                  

consolidated Sales = 800000 + 300,000 - 100000

                                = $ 1,000,000                    

Consolidated COGS = $600,000 + $180,000 - 100,000 + 10,000

                                  = 690,000

easy math just plug in a and b

step-by-step explanation:

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