Reference no: EM133171477

Questions -

Q1. TT Company holds 90 percent of BB Company's common stock. In the current year, TT reports sales of P800,000 and cost of goods sold of P600,000. For this same period, BB has sales of P300,000 and cost of goods sold of P180,000. During the current year, TT sold merchandise to BB for P100,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. TT had established the transfer price based on its normal markup. What are the cost of goods sold?

Q2. TT Company owns 100 percent of the capital stock of both BB Corporation and CC Corporation. BB purchases merchandise inventory from CC at 125 percent of CC's cost. During 20x9, CC sold inventory to BB that it had purchased for P25,000. BB sold all of this merchandise to unrelated customers for P56,892 during 20x9. In preparing combined financial statements for 20x9, TT's bookkeeper disregarded the common ownership of BB and CC. What amount should be eliminated from cost of goods sold in the combined income statement for 20x9?