Question

Use the same information as in problem (5) except assume that the transfers were from Bottom Com- pany to Top Company. What are the consolidated sales and cost of goods sold?

a. $1,000,000 and $720,000
b. $1,000,000 and $755,000
c. $1,000,000 and $696,000
d. $970,000 and $712,000

Answer 1

The consolidated sales and cost of goods sold remain the same as in problem (5): $1,000,000 and $720,000 respectively.

Step-by-step explanation:

To determine the consolidated sales and cost of goods sold when the transfers are from Bottom Company to Top Company, we need to use the information provided in problem (5). In problem (5), it was stated that the sales revenue was $1 million, and the cost of goods sold was $720,000. Since the transfers are from Bottom Company to Top Company, the consolidated sales and cost of goods sold will remain the same as in problem (5), which are $1,000,000 and $720,000 respectively.