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Assume that Big Company owns 80% of S Company and 90% of T Company. During year X1, S sold 1,000 units of merchandise to T for$50,000 that cost S $40,000. On 12/31/X1 a count of T's inventory revealed that 400 of the units purchased from S remain. Assume that pre-closing trial balances will be consolidated on 12/31/X1. Based on this information, which of the following consolidation worksheet entries should be made in connection with the internal sales? Select one: a. Debit Sales for $50,000, Credit COGS for $40,000, Credit Inventory for $10,000. b. Debit Sales for $30,000, Credit COGS for $24,000, Credit Inventory for $6,000. c. Debit Sales for $20,000, Credit COGS for $16,000, Credit Inventory for $4,000. d. Debit Sales for $18,000, Credit COGS for $14,400, Credit Inventory for $3,600. e. None of the Above

This question is a continuation of the preceding question. Assume that Big is consolidating the pre-closing trial balances of S and T on 12/31/X2. Assuming that S made no sales to T in year X2, which of the following consolidation worksheet entries should be made?

Select one:

a. Debit Retained Earnings: S for $10,000, Debit COGS for $40,000, and Credit Sales for $50,000.

b. Debit Retained Earnings: S for $6,000, Debit COGS for $24,000, and Credit Sales for $30,000.

c. Debit Retained Earnings: S for $4,000, Debit COGS for $16,000, and Credit Sales for $20,000.

d. Debit Retained Earnings: S for $3,600, Debit COGS for $14,400, and Credit Sales for $18,000.

e. None of the Above

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