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question the sale of a significant amount of inventory by a parentcompany to its 100 4289732

Question

The sale of a significant amount of inventory by a parentcompany to its 100-percent owned subsidiary:

a. Is included in consolidated revenue only if the transfer wasthe result of an arm’s-length bargain.

b. Affects consolidated net income under the periodic inventorysystem, but not under the perpetual inventory system.

?c. Does not increase consolidated net income until the inventoryis sold to outside entities (entities not part of the consolidatedgroup). d. Does not require an adjustment in consolidate if theinventory was sold at parent company’s cost.

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