Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 21

Aceton Corporation owns 80 percent of the outstanding stock of Voctax, Inc. During the current year. Voctax made $140,000 in sales to Aceton. How does this transfer affect the consolidated statement of cash flows
A)The transaction should be included if payment has been made.
B)Only 80 percent of the transfers should be included because the subsidiary made the sales.
C)Because the transfers were from a subsidiary organization, the cash flows are reported as investing activities.
D)Because of the, intra-entity nature of the transfers, the amount is not reported in the consolidated cash flow statement.