Fundamentals of Advanced Accounting
6th Edition
ISBN: 9780077862237
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Chapter 5, Problem 2P
To determine
Identify the appropriate answer for the given statement from the given choices.
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Choose the correct. James Corporation owns 80 percent of Carl Corporation’s common stock. During October, Carl sold merchandise to James for $250,000. At December 31, 40 percent of this merchandise remains in James’s inventory. Gross profit percentages were 20 percent for James and 30 percent for Carl. The amount of intra-entity gross profit in inventory at December 31 that should be eliminated in the consolidation process is: a. $24,000b. $30,000c. $20,000d. $75,000
K owns 80% of T’s common stock. During October T sold merchandise to K for $250,000. On December 31 40% of this merchandise remains in K’s inventor. Gross profit percentages were 20% for K and 30% for T. What amount of intra-entity gross profit in inventory on December 31 should be eliminated in the consolidation process?
James Corporation owns 80 percent of Carl Corporation’s common stock. During October, Carl sold merchandise to James for $250,000. At December 31, 40 percent of this merchandise remains in James’s inventory. Gross profit percentages were 20 percent for James and 30 percent for Carl. The amount of intra-entity gross profit in inventory at December 31 that should be eliminated in the consolidation process isa. $24,000b. $30,000c. $20,000d. $75,000
Chapter 5 Solutions
Fundamentals of Advanced Accounting
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Use the same information as in problem (5) except...Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - What is the consolidated total for inventory at...Ch. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 1DYSCh. 5 - Prob. 2DYS
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- Scarlet Company owns 80% of Tamara Corp.'s common stock. During October 2019 Tamara sold merchandise to Scarlet for 125,000. At December 31, 2019, one-half of the merchandise remained in Scarlet inventory. For 2019, gross profit percentages were 30% for Scarlet and 40% for Tamara. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: O 20,000 O 18,750 O 25,000 O 50,000arrow_forwardLet Company owns 80% of Tam Corp.’s common stock. During October 2019 Tam sold merchandise to Let for 125,000. At December 31, 2019, one-half of the merchandise remained in Let inventory. For 2019, gross profit percentages were 30% for Let and 40% for Tam. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: a.) 50,000 b.) 20,000 c.) 18,750 d.) 25,000arrow_forwardSubject: Corporate Accounting Q) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: (i) Sales.....Dr 15,000 Cost of Sales...Cr 13,000 Inventory..........Cr 2,000 (ii) Deferred Tax Asset...Dr 300 Income Tax Expense...Cr 300Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii) Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis.arrow_forward
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