Webb Co. acquired 100% of Rand Inc. on January 5, 2018. During 2018, Webb sold goods to Rand for $2,400,000 that cost Webb $1,800,000. Rand still owned 40% of the goods at the end of the year. Cost of goods sold was $10,800,000 for Webb and $6,400,000 for Rand. What was consolidated cost of goods sold?

Question

Business

Jefferson Pham

21 January, 10:01

Webb Co. acquired 100% of Rand Inc. on January 5, 2018. During 2018, Webb sold goods to Rand for $2,400,000 that cost Webb $1,800,000. Rand still owned 40% of the goods at the end of the year. Cost of goods sold was $10,800,000 for Webb and $6,400,000 for Rand. What was consolidated cost of goods sold?

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Answers (1)

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Eliana Webb · Answer 1

The correct answer to the following question is $ 15,040,000.

Explanation:

The given information -

Webb (parent company) cost for selling goods to Rand inc (subsidiary) -

$1800,000

Cost of goods sold for Webb - $10,80,000

Cost of goods sold for Rand is - $6400,000

Here Rand inc has 40% of the good left with them which cost -

$2400,000 - $1800,000

= $600,000 x 40%

= $240,000

The consolidated cost of good sold =

$ 10,80,000 + $6400,000 - $2400,000 + $240,000

= $15,040,000