Paige, Inc. owns 80% of Sigler, Inc. During 2011, Paige sold goods with a 40%gross profit to Sigler. Sigler sold all of these goods in 2011. For the 2011consolidated financial statements, how should the summation of Paige andSigler income statement items be adjusted?a. Sales and cost of goods sold should be reduced by the intercompanysales.b. Sales and cost of goods sold should be reduced by 80% of theintercompany sales.c. Net income should be reduced by 80% of the gross profit on intercompanysales.d. No adjustment is necessary.

Option a: This option is correct because, in the preparation of the consolidated statements,…

Answered: Paige, Inc. owns 80% of Sigler, Inc.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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