Aceton Corporation owns 80% of the outstanding stock of Voctax, Inc. During the current year, Votax made $140,000 in sales to Aceton. How does this transfer affect the consolidated statement of cash flows?
A) the transaction should be included if payment has been made
B) only 80% of the transfers should be included because the subsidiary made the sales
C) because the transfers were from a subsidiary organization, the cash flows are reported as investing activities.
D) because of the intra-entity nature of the transfers, the amount is not reported in the consolidated cash flow statement.
Ans: D) because of the intra-entity nature of the transfers, the amount is not reported in the consolidated cash flow statement.
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