International Business 8th Edition by Charles Hill

Exercise 8

The following are selected amounts from the separate financial statements of a parent company (unconsolidated) and one of its subsidiaries:
Notes:
i. Parent owes subsidiary $70.
ii. Parent owns 100 percent of subsidiary. During the year subsidiary paid parent a dividend of $250.
iii. Subsidiary owns the building that parent rents for $200.
iv. During the year parent sold some inventory to subsidiary for $2,200. It had cost parent $1,500. Subsidiary, in turn, sold the inventory to an unrelated party for $3,200.
Given this,
a. What is the parent's (unconsolidated) net income
b. What is the subsidiary's net income
c. What is the consolidated profit on the inventory that the parent originally sold to the subsidiary
d. What are the amounts of consolidated cash and receivables