Question

Alpha Company owns 80 percent of the voting stock of Beta Company. Alpha and Beta reported...

Alpha Company owns 80 percent of the voting stock of Beta Company. Alpha and Beta reported the following account information from their year-end separate financial records:

Alpha Beta
Inventory $95,000 $88,000
Sales Revenue 800,000 300,000
Cost of Goods Sold 600,000 180,000

During the current year, Alpha sold inventory to Beta for $100,000. As of year end, Beta had resold only 60 percent of these intra-entity purchases. Alpha sells inventory to Beta at the same markup it uses for all of its customers.

Problem 5-6 (Static) (LO 5-2, 5-3)

What is the total for consolidated cost of goods sold?

Multiple Choice

  • $790,000

  • $690,000

  • $788,000

  • $670,000

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Answer #1

Correct Answer is $ 6,90,000

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