Which оf the fоllоwing аccurаtely describes non-routine cognitive skills?
Use the fоllоwing tо аnswer the next two questions (below): The Intercompаny Sаle of Inventory between the Subsidiary and the Parent creates an “error” in the Consolidated Financial Statements and is not allowed. At the end of 2024, merchandise sales from the Subsidiary to the Parent totaled $10,000 with an expected gross profit of 30%. All of the merchandise remained unsold (and unrealized) by the Parent. Later in 2025, the Parent sold all of this inventory. In 2025, the Subsidiary had $12,000 in merchandise sales to the Parent and is expecting a gross profit is 30%. At the end of 2025, all of the merchandise remain unsold (and unrealized) by the Parent. Both Entities use a 30% tax rate. An Intercompany Schedule was started for you. Upon completing the Intercompany Schedule, the Controller will ask you questions about it: Required: Answer question 1 and question 2 by selecting the best answer from the choices in the section below: On the 2025 Consolidated Financial Statements, what effect does this $10,000 Intercompany Sale of merchandise inventory have on the Consolidated Balance Sheet before making the adjustment(s) on December 31, 2025? BI does not affect this Consolidated Balance Sheet BI ↑ by $10,000 BI ↓ by $10,000 BI ↑ by $3,000 BI ↓ by $3,000 If the 2024 and 2025 Intercompany Transactions are left unadjusted, what affect do these have on the certain accounts found on the 2025 Consolidated Financial Statements? Beginning Inventory ↑ by $10,000 Total Income Tax Expense will be overstated by $180 Ending Inventory ↑ by $12,000 Both Beginning Inventory ↑ by $10,000 AND Ending Inventory ↑ by $12,000 Total Net Income will be overstated by $2,520