Chapter 10 Self Test 3 & 4

[Joanne Preece]

I’m using the fourth edition book and I think there may be an error in the solutions for Chapter 10, self test questions 3 & 4.

Question 3 – the total of the debit and credit columns is showing $1,411,000 but I have added them up many times and they seem to total $1,431,000.  The calculations seem to be correct added across and at the bottom of the consolidated balance column.

Question 4 – in the solutions the figure for Sales is DR $150,000 and Purchases CR $150,000 but the question says the inter-company sales were $90,000.

Am I misunderstanding the questions?

Thanks

Jo

 

[Chandrika]

Hi Jo,

Thank you for your inquiry. I agree with both comments.

Question 03 – Total elimination entries are added up to $1,431,000

Question 04 – Inter company sales are $90,000 therefore Elimination entry (2) should be corrected as $90,000. Consolidated column should also change accordingly.