Parkette, Inc., acquired a 60 percent interest in Skybox Company several years a
ID: 2500916 • Letter: P
Question
Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2014, Skybox sold inventory costing $270,000 to Parkette for $337,500. A total of 13 percent of this inventory was not sold to outsiders until 2015. During 2015, Skybox sold inventory costing $259,250 to Parkette for $305,000. A total of 32 percent of this inventory was not sold to outsiders until 2016. In 2015, Parkette reported cost of goods sold of $560,000 while Skybox reported $337,500. What is the consolidated cost of goods sold in 2015?
$903,365.
$570,750.
$586,635.
$598,365
Explanation / Answer
unrealised profit of inv 2014 in 2015= (337500-270000)*0.13=67500*0.13=8,775
unrealised profit of inv obtained in 2015 and sales in 2015=(305000-259250)*(1-0.32)=45750*0.68=31,110
Cost of goods sold in skybox=337500-31,110-8775-259250=38365
cost of goods sold in PArkette=560000
consolidated cost of goods sold in 2015=560000+38365=598365$