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Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany
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29 votes
29 votes
Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany sales and sales to nonaffiliates. Required: a. What amount of sales will be reported in the consolidated income statement for 20X8

User Secondubly
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15 votes
15 votes

Answer: $790,000

Step-by-step explanation:

The amount of sales that should be recorded in the consolidated statement is the total sales of each company less the sales of each company to each other.

Consolidated sales = (660,000 + 510,000) - (140,000 + 240,000)

= 1,170,000 - 380,000

= $790,000

Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart-example-1
User Blazkovicz
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