On December 31, 2023, Powder Corporation acquired 100% of the common shares of Talc Corporation. There were no fair value differences or goodwill resulting from this transaction. The following information s extracts from the December 31, 2026 for Powder and Talc: Net income Dividends Property, plant, and equipment (net) Inventory Additional information: . $667,000 $618,400 On December 31, 2024, Powder sold a piece of equipment to Talc, recording a profit of $250,000. At that time, the -stimated useful life of the equipment of 10 years. In 2025, Talc sold $250,000 in inventory to Powder. At the end of 2025, Powder still held 22% of the inventory. In 026, Talc sold $300,000 in inventory to Powder. Powder still held 30% of the inventory at the end of 2026. Talc earns -0% gross profit on all of its inventory sales. - Powder uses the cost method to account for its investment in Talc. Both companies pay tax at a rate of 20%. What is the inventory amount that would be recorded on the December 31, 2026, consolidated statement of financial position? $661,600 $ $613,000 Powder 1,950,000 250,000 595,000 375,000 Talc $1,100,000 125,000 850,000 265,000

On December 31, 2023, Powder Corporation acquired 100% of the common shares of Talc Corporation. There were no fair value differences or goodwill resulting from this transaction. The following information s extracts from the December 31, 2026 for Powder and Talc: Net income Dividends Property, plant, and equipment (net) Inventory Additional information: . $667,000 $618,400 On December 31, 2024, Powder sold a piece of equipment to Talc, recording a profit of $250,000. At that time, the -stimated useful life of the equipment of 10 years. In 2025, Talc sold $250,000 in inventory to Powder. At the end of 2025, Powder still held 22% of the inventory. In 026, Talc sold $300,000 in inventory to Powder. Powder still held 30% of the inventory at the end of 2026. Talc earns -0% gross profit on all of its inventory sales. - Powder uses the cost method to account for its investment in Talc. Both companies pay tax at a rate of 20%. What is the inventory amount that would be recorded on the December 31, 2026, consolidated statement of financial position? $661,600 $ $613,000 Powder 1,950,000 250,000 595,000 375,000 Talc $1,100,000 125,000 850,000 265,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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