A owns 30% of the stock of B. During the year, A sold inventory to B for $ 96,000. A charges a profit of 20% on cost. At the end of the year, B had $ 24,000 of the inventory still on hand. What is the unrealized profit on this sale? (A) $ 1,200 (B) $ 1,440 (C) $ 16,000 (D) $ 19,200

A owns 30% of the stock of B. During the year, A sold inventory to B for $ 96,000. A charges a profit of 20% on cost. At the end of the year, B had $ 24,000 of the inventory still on hand. What is the unrealized profit on this sale? (A) $ 1,200 (B) $ 1,440 (C) $ 16,000 (D) $ 19,200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: 1. Journalize the entries to record the following selected transactions of Oliver Co.: (a) Purchased…

A: A bond is generally issued to acquire the required funds to meet the requirements. The bond issuer…

Q: 4. Pate Corp. owns 80% of Strange Inc.’s common stock. During 20X1, Pate sold inventory to Strange…

A: Cost of sales refers to the amount paid for the purchase of inventory of goods that should be sold…

Q: The Distance Plus parnership has the following capital balances at the beginning of the current…

A: A ) Calculation of total capital after Sergio invests: = 65000 + 35000 + 50000 + 70000 = 220000…

Q: Required: Prepare the consolidation journal entries for the elimination of the above inter-company…

A: 1) Dr. Loan payable ( Strong books) 26000 Cr. loan receivable (Position books) 26000 (Note 1) 2)…

Q: 4. Magsano Company is planning to sell the business to new interests. The accumulative net earnings…

A: Computation of Goodwill if excess earnings are purchased for 5 years: Step 1 - Normal profit =…

Q: Several years ago, Sa Co purchased 80% of Su Co's equity share capital. Sa Co made a profit after…

A: Profit attributable to parent company includes the profit earned by is own and proportionate share…

Q: During 2021, Wahid Co. generated revenues of $95,000. The company's expenses were as follows: cost…

A: Gross profit : Net sales is the sales revenue after deducting all the returns and allowances from…

Q: a. Inventory with a carrying amount of P 100,000 has a net realizable value of P 80,000. It is…

Q: On January 1, 2021 Asset of Matalino Company was P2,500,000 and its liabilities was P800,000. By…

A: As per given information On January 1, 2021 Assets = P2,500,000 Liabilities = P800,000 On December…

Q: The following comparative information is available for Blossom Company for 2025. LIFO FIFO Sales…

A: 1. LIFO (Last-In, First-Out)Step 1: Calculate the Gross ProfitGiven:Sales Revenue: $89,000Cost of…

Q: r corporation has 1,000 shares of common stock outstanding, 200 of which are owned by doug. on june…

A: Redemption means company company buy its own share from shareholders.

Q: During 20X1, Blue Corporation sold products for $3,000,000 with the sales returns and allowances of…

A: Comprehensive income statement is the part of financial statement prepared to know the overall…

Q: e-tax gain of $38,361. O , Sub sold depreciable before-tay gain cf $76

A: The correct option as,

Q: Thompson owns 100% of Rollins and at December 31, 2012, its Investment in Rollins account stands at…

A: a. Date Account Titles Debit Credit Dec 31, 2012 Cash $2,500,000 Investment in Rollins…

Q: P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and…

A: S sold merchandise to P for $40,000, but the cost to S was $32,000.Therefore, the profit on inter…

Q: Ram Company bought all the shares of Lal Company on January 1, Year 1 for 2,000,000. During that…

A: Introduction: A company's current assets are the resources it has and plans to turn into cash within…

Q: Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting…

A: Unrealized profit, December 31, 2020 = [($20,000 / $75,000) x $15,000] x 40% = $1,600

Q: On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000.…

A: The journal entries are the basic method for recording transactions. The portion of shares acquired…

Q: Jubilee, Inc., owns 30 percent of JPW Company and applies the equity method. During the current…

A: Inventory is one of the important current asset of the business. Cost of goods sold is deducted from…

Q: Entity P acquired 30% of the equity shares of Entity A several years ago at a cost of Rs. 275,000.…

A: Solution a) Unrealized Profit and Double entry Information…

Q: Alpha limited commenced business on 1January 2022 with a single item of inventory costing £120,000.…

A: There are two type of capital maintenance which is financial capital maintenance and physical…

Q: Tweet Inc. owns 10% of the stock of Gray Matter, Inc. Gray Matter, Inc. is a domestic corporation.…

A: The Dividends Received Deduction (DRD) is a tax deduction available to corporations for the…

Q: Citrus Corporation is a calendar year S corporation with the following current year information:…

A: Citrus corporation has a operating loss of $(240000) Grapefruit bought 60% of Citrus corporation for…

Q: The Distance Plus Partneship has the following capital balances at the beginning of the current…

A: Solution A. Total capital after Sergio new investment: Tiger $ 135,000 Phil…

Q: January Transactions a. On 1/01, OPC paid employees' salaries and wages that were previously accrued…

A: Journal Entry It is important to enter the required journal entries into the debit and credit of…

Q: Bill purchased 1500 shares of Bullseye stock (100,000 shares are issued and outstanding) when the…

Q: Farmer Corporation purchases 30% of the common stock of Jackson, Inc. at a purchase price of $13.5…

A: Equity investment is defined as money invested in the stock market by an individual and company by…

Q: What is McCannon’s taxable income in the fifth year, assuming the 80% taxable income limit applies…

A: McCannon Inc. has a carry forward loss of $ 1,15,200 for its first three years of operations. The…

Q: On the 20th June 2023, Proton Motors Ltd sold inventories costing $120,000 to Electron Ltd for…

A: Proton Motors Ltd sold inventories to Electron Ltd at a loss, leading to a reduced tax liability for…

Q: Palm Company owns 100% of Soso Company. During year X1, Soso sold merchandise costing $50,000 to…

A: Soso sold merchandise cost =$ 50000 profit realised on it =$ 30000 But, 40% stock…

Q: A company sells 180,000 (sale price) of goods and collect sales tax of 8%. What current liability…

A: Current liability means the amount which the business has the obligation to pay within short term…

Q: Steinbart reports net income of $104,500 in 2023 and $139,300 in 2024 and declares $20,000 in…

A: An equity investment defined :- It is invested in a company by procurement of stocks of that company…

Q: What is the consolidated cost of sales for the year ended 30 June 20X5? a. $340,000 b. $350,000 c.…

A: The answer for the multiple choice question and relevant working are presented hereunder : Wye…

Q: Competition Company purchases all of the stock of Piano Corp. for $5,250 on January 1st. The…

A: The company can purchase the common shares of another company for investment purposes. The investor…

Q: 3. Tinnell Industries had gross sales of $30,000 for the year. Its cost for the goods sold was…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Goddy Company owns 80% of the common stock of Morris, Inc. In the current year, Goddy reports sales…

A: Consolidated cost of goods which are sold comes after adding the cost of goods sold of subsidiary…

Q: P acquired 70% of S in 20X8. The statements of profit or loss of the two companies for the year…

A: Consolidated Financial Statements: Consolidation statements are the financial statements prepared by…

Q: ABC purchases 118 shares of XYZ company at $38 per share in its margin account. ABC finances part of…

A: The return on investment (ROI) is a financial metric that calculates the profitability of an…

Question

(A) $ 1,200

(B) $ 1,440

(D) $ 19,200

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Computation of the total unrealized profit on inventory still on hand:

VIEW

Step 2: Computation of the share of A from the unrealized profit on this sale:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

10. MHD LLC a trading company dealing in fast moving consumer goods. Their trading results for the year ending 31st Dec, 2019 shows profit.of RO45750. for Accannt The following additional information is also given: The company owned a building cost RO90000. Company charged depreciation on building dihawind d at 9% per annum while in Oman tax law it is prescribed @ 4%. Company purchased a land for business purposes costing RO30000. The accountant nan cdecd ci charged depreciation on land at 10% per annum. The company made a donation on the occasion of Ramadan festival worth of RO4500 which was charged on the income statement. The gross income of the company amounts RO52650 before correcting the inventory valuation. The ledger book overvalued the opening inventory by RO1350 and undervalued closing inventory by RO1250 Company purchased computers to make all billing and administrative work computerized for RO3000 and accountant has expensed this cost. Company also offering…
The unrealized profits in the year-end 2019 and 2020 inventories were: A. 65,000 and 81,250 respectively B. 30,400 and 13,000 respectively C. 13,000 and 16,250 respectively D. 520,000 and 65,000 respectively
Brittney owns 30% of Orange Company, a C-Corporation. Orange Company has $600,000 in operating income during the year. Orange Company also makes a $10,000 cash dividend distribution to Brittney. How much income should Brittney include in gross income this year from Orange Company? Group of answer choices $10,000. $180,000. $190,000. $610,000.
Par Inc owns 77.11% of Sub Corp. During the year, Par sold inventory to Sub for $79,271. Exactly 47.83% of this inventory remained in Y's warehouse at year end. Sub sold inventory to Par for $39,636 of which 39.47% remained in X's warehouse at year end. Both companies are subject to a tax rate of 28.35%. The gross profit percentage on sales is 20% for both companies. What is the after-tax dollar value of Par's unrealized profits during the year on its sales to Sub? a. $5,433 b. $5,977 c. $5,705 d. $5,569 e. $5,841
Jackson Moving & Storage Co. paid $120,000 for 25% of the common stock ofMcDonough Co. at the beginning of the year. During the year, McDonough earned netincome of $50,000 and paid dividends of $20,000. The carrying value of Jackson’s investment in McDonough at the end of the year isa. $150,000.b. $170,000.c. $120,000.d. $127,500.
Marine Corporation collected $120,000 during 2020. Of this amount, $2,000 was still unearned as of December 31, 2020. The company reported sales of $128,000. Marine purchased inventory during 2020 of $48,000, and the inventory account balance was the same at the beginning and the end of the year. What was the company's gross profit for 2020?
24 At the beginning of the year, Fairbridge, Inc. purchased an investment in Miller Milling Mills for $500,000, representing 10% of the book value of Miller. During the year, Miller reported net income of $800,000 and pays cash dividends of $92,000. At the end of the year, the fair value of Fairbridge’s investment is $525,000. Required At what amount is the investment reported on Fairbridge’s balance sheet at year-end? What amount of income from investments does Fairbridge report? Prepare journal entries to record the transactions for Fairbridge Company.
Carlos Bakery owns 60 percent of the stocks of Zeus Products acquired several years ago at book values. On January 1, 2021, inventory reported by Carlos included 20,000 bags of flour purchased from Zeus at P90 per bag. By December 31, 2021, all of these had been baked into products and sold to customers by Carlos Bakery. There were no other transactions between them during 2021. Both Carlos and Zeus price their sales at cost plus 50% mark up for profit. Carlos reported net income from its own operations of P3,000,000 and Zeus reported net income of P2,500,000 in 2021. Compute the consolidated net income for 2021
P Company owns 70% of S Company's common stock. During 2020, S sold $800,000 of merchandise to P With a profit margin of 25% of the cost. At December 31, 2016, one-fourth (1/4) of the merchandise remained in P's inventory.. The amount of unrealized inter-company profit that should be eliminated on the work-paper is Select one: O 28000 O 40000 200000 30000
Ee 498.
On January 1, Star Corp sold 10,000 shares of stock at $26 per share. Later in the year, Star Corp acquired all the shares from the market paying $28 per share. Assuming the cost method is used, what is the debit to common stock from this transaction? (Lesson 12.3) (If you do not know this JE. you should review it.) O a.so Ob. $260,000 OC. $20,000 d.$280.000
3. Abbot Company purchased 80% of Costello Company on January 1, 20X1. The purchase price paid was $600,000. On that day, the book value of Costello was $500,000. Excess of cost over book value is due to goodwill. Included in Costello's income are intercompany sales to Abbot of $40,000 with a cost to Costello of $25,000. 30% of this inventory is on hand in the Abbot inventory at December 31, 20X3. In addition, inventory sold at a profit of $5,000 was in the inventory of Abbot at December 31, 20X2. Complete the consolidation worksheet. First, complete the financial statements below. Below are the balances of accounts of Abbot and Costello at December 31, 20X3. Consolidation Entries Consolidated Bal. Abbot Costello Dr. Cr. Sales $50,000 $250,000 Expenses 30,000 150,000 Income from S.…