Cadion Co.owned a controlling interest in Knieval Inc.Cadion reported sales of $420,000 during 2018 while Knieval reported $280,000.Inventory costing $28,000 was transferred from Knieval to Cadion (upstream) during the year for $56,000.Of this amount, twenty-five percent was still in ending inventory at year's end.Total receivables on the consolidated balance sheet were $112,000 at the first of the year and $154,000 at year-end.No intra-entity debt existed at the beginning or ending of the year.Using the direct approach, what is the consolidated amount of cash collected by the business from its customers?
A) $602,000.
B) $644,000.
C) $686,000.
D) $714,000.
E) $592,000.

Question

Quizplus · Accepted Answer

Consolidated sales = Cadion sales + Knieval sales - upstream transfer= $420,000 + $280,000 - $56,000= $644,000Consolidated cash collected = Consolidated sales + Beginning receivables - Ending receivables= $644,000 + $112,000 - $154,000= $602,000

Cadion CoOwned a Controlling Interest in Knieval Inc