Top company holds 90 percent of bottom company’s common stock. in the current year, top reports sales of $1,010,000 and cost of goods sold of $757,500. for this same period, bottom has sales of $510,000 and cost of goods sold of $310,000. during the current year, top sold merchandise to bottom for $310,000. the subsidiary still possesses 40 percent of this inventory at the current year-end. top had established the transfer price based on its normal gross profit rate. what are the consolidated sales and cost of goods sold?

Sales Consolidated                     $1,159,000

COGS consolidated                    $804,000

Explanation:

The company will need to remove their sales between affiliates, because the goal for the consolidate statment is to represent the group performance with external entities

Sales Top                                       $1,010,000

-sales between afilliates        -$310,000

90% Bottom                                 $459,000

Sales Consolidated                     $1,159,000

COGS top                                     $757,500

-COGS sales between afiliated  -$232500 (cross multiply)

90% Bottom                                 $279,000

COGS consolidated                    $804,000

cross multiply:

1,010,000 generates 757,500 of COGS

310,000 generates   310,000x757,500/1,010,000 = 232,500 COGS

i would say their habit of breaking down.

answer; dogs;