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are you struggling to pass the cpa exam did your review course fail to fit your learning style im darius clark of i-75 cpa review the number one course supplement where the right teacher makes all the difference so inter-company inventory parent and sub when they sell to each other is a hot topic on the cpa far exam so if the parent corp owns a hundred percent or even if they own eighty percent of the stock of the sub you have this issue whenever the parent sells inventory to the sub or the sub sells inventory to the parent it doesnt matter which direction its the same issue so the parent in this example is going to sell inventory that cost them eight hundred thousand to the sub for nine hundred thousand and theres going to be a hundred thousand dollar profit on the sale but this is a wholly owned subsidiary and you cant show profit of that hundred thousand none of the inventory purchased by the sub was sold yet to outsiders by december 31st year one so they bought the inventory
