ABC Corporation owns 75 percent of XYZ Company's voting shares.During 2008,ABC produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to XYZ for $90 each.XYZ sold 18,000 of the chairs to unaffiliated companies for $117 each prior to December 31,2008,and sold the remainder in early 2009 for $130 each.Both companies use perpetual inventory systems.
-Based on the information given above,what amount of cost of goods sold did ABC record in 2008?

Question

Quizplus · Accepted Answer

ABC Corporation sold 35,000 chairs to XYZ at a cost of $79 each. Therefore, the cost of goods sold recorded by ABC in 2008 is 35,000 chairs * $79 = $2,765,000.

ABC Corporation Owns 75 Percent of XYZ Company's Voting Shares