Use the following information to answer the question(s)below..
Pelga Company routinely receives goods from its 80%-owned subsidiary,Swede Corporation.In 2011,Swede sold merchandise that cost $80,000 to Pelga for $100,000.Half of this merchandise remained in Pelga's December 31,2011 inventory.This inventory was sold in 2012.During 2012,Swede sold merchandise that cost $160,000 to Pelga for $200,000.$62,500 of the 2012 merchandise inventory remained in Pelga's December 31,2012 inventory.Selected income statement information for the two affiliates for the year 2012 was as follows:

-Consolidated cost of goods sold for Pelga and Subsidiary for 2012 were
A)$512,000.
B)$526,000.
C)$522,500.
D)$528,000.

Question

Use the following information to answer the question(s)below..
Pelga Company routinely receives goods from its 80%-owned subsidiary,Swede Corporation.In 2011,Swede sold merchandise that cost $80,000 to Pelga for $100,000.Half of this merchandise remained in Pelga's December 31,2011 inventory.This inventory was sold in 2012.During 2012,Swede sold merchandise that cost $160,000 to Pelga for $200,000.$62,500 of the 2012 merchandise inventory remained in Pelga's December 31,2012 inventory.Selected income statement information for the two affiliates for the year 2012 was as follows:
 
-Consolidated cost of goods sold for Pelga and Subsidiary for 2012 were
A)$512,000. 
B)$526,000. 
C)$522,500. 
D)$528,000.

Quizplus · Accepted Answer

C)
Combined Cost of Goods Sold $720,000
Less: Intercompany sales (200,000)
Adjust: Profit -10,000+12,500 2,500
Consolidated Cost of Goods Sold $522,500

Use the Following Information to Answer the Question(s)below