Economics · Financial Accounting
Pearl Co has controlled an 80% owned subsidiary, Silver Co, for many years. Silver Co sold goods to Pearl Co for $120,000 at a mark-up of 20% during the year. Pearl Co had sold half of these goods by the year end. Which of the following combinations correctly identifies the True/False status of the intra-group transactions in the consolidated financial statements? Statements: 1. Revenue must be reduced by a total of $120,000. 2. Cost of sales must be reduced by a total of $110,000. 3. Non-controlling interest must be reduced by $2,000.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11: True, 2: True, 3: False
- 21: False, 2: False, 3: False
- 31: True, 2: True, 3: True✓
- 41: True, 2: False, 3: False
Correct answer
1: True, 2: True, 3: True
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