Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7,at underlying book value.On that date,the fair value of noncontrolling interest was equal to 10 percent of the book value of Scrooge Corporation.Pilfer purchased inventory from Scrooge for $90,000 on August 20,20X8,and resold 70 percent of the inventory to unaffiliated companies on December 1,20X8,for $100,000.Scrooge produced the inventory sold to Pilfer for $67,000.The companies had no other transactions during 20X8.
-Based on the information given above,what amount of sales will be reported in the 20X8 consolidated income statement?

Question

Quizplus · Accepted Answer

The sales amount to be reported in the 20X8 consolidated income statement is $100,000. This is because Pilfer purchased inventory worth $90,000 from Scrooge and resold 70% of it for $100,000. The amount of inventory sold to unaffiliated companies is considered as revenue, which will be reported in the consolidated income statement. Therefore, option C is the correct answer.

Pilfer Company Acquired 90 Percent Ownership of Scrooge Corporation in 20X7,at