Wolff Corporation owns 70 percent of the outstanding stock of Donald, Inc.During the current year, Donald made $75,000 in sales to Wolff.How does this transfer affect the consolidated statement of cash flows?
A) Included as a decrease in the investing section.
B) Included as an increase in the operating section.
C) Included as a decrease in the operating section.
D) Included as an increase in the investing section.
E) Not reported in the consolidated statement of cash flows.

Question

Quizplus · Accepted Answer

Intercompany sales between Wolff Corporation and Donald, Inc. are eliminated in the consolidation process, so they do not affect the consolidated statement of cash flows.

Wolff Corporation Owns 70 Percent of the Outstanding Stock of Donald