Patti Company owns 80% of the common stock of Shannon

Patti Company owns 80% of the common stock of Shannon

REFERENCE: Ref. 05_08

Patti Company owns 80% of the common stock of Shannon, Inc.  In the current year, Patti reports sales of $10,000,000 and cost of goods sold of $7,500,000.  For the same period, Shannon has sales of $200,000 and cost of goods sold of $160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on the normal markup.  At the end of the year, Shannon still possesses 30 percent of this inventory.

QUESTION #24

REFER TO: Ref. 05_08

62. Compute consolidated sales.

A)  $10,000,000.

B)  $10,126,000.

C)  $10,140,000.

D)  $10,200,000.

E)  $10,260,000.

QUESTION #25

REFER TO: Ref. 05_08

63. Compute consolidated cost of goods sold.

A)  $7,500,000.

B)  $7,600,000.

C)  $7,615,000.

D)  $7,604,500.

E)  $7,660,000.

QUESTION #26

REFER TO: Ref. 05_08

64. Assume the same information, except Shannon sold inventory to Patti.  Compute consolidated sales.

A) $10,000,000.

B)  $10,126,000.

C) $10,140,000.

D) $10,200,000.

E)  $10,260,000.