Freon owns 100% of Froze. Before consolidation, Freon reports sales of $10,000,000 and COGS of...
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Freon owns 100% of Froze. Before consolidation, Freon reports sales of $10,000,000 and COGS of $6,000,000. Froze reports sales of $2,000,000 and COGS of $1,400,000 During the current year, Froze sells inventory costing $200,000 to Freon for $250,000. At year end, Freon has resold all but $10,000 of this inventory. Please answer the following for both Part A and Part B: these two parts are independent of each other!
1. What is the consolidated sales number for the year
2. What is the consolidated COGS number for the year
3. Is there an adjustment to consolidated inventory at year-end, and if so, how much?
4. Will there be any adjustments on the parent's stand-alone books related to this transaction, and if so, how much.
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