Grand Teton Inc. own 25% of Grand Canyon Inc. and applies the equity method. During the...
Grand Teton Inc. own 25% of Grand Canyon Inc. and applies the equity method. During the current Year, Grand Teton sold merchandise with a cost of $120,000 to Grand Canyon for $180,000. At the end of the year Grand Canyon still hold half of that merchandise. What amount of gross profit should Grand Teton defer to next year?
a. 7,500
b. 15,000
c. 30,000
d. 60,000
e. all answers incorrect
Homework Answers
Under the equity method, inter company transactions are not eliminated.
All the profit is recognized in the year of sale and not deferred to the next year.
The answer is e.
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Grand Teton Inc. own 25% of Grand Canyon Inc. and applies the
equity method. During the...
Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year,...
Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $133,600 and then sells it to Watkins for $167,000. At the end of the year, Watkins still holds only $27,000 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method?
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year,...
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $54,000 and then sells it to Watkins for $90,000. At the end of the year, Watkins still holds only $20,000 of merchandise. What amount of unrealized gross profit must Panner defer in reporting this investment using the equity method? a. $2,400 b. $4,800. c. $8,000. d. $10,800
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year,...
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $93,100 and then sells it to Watkins for $133,000. At the end of the year, Watkins still holds only $21,400 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method? Multiple Choice o $10,026. • $1,926. O $4,926. o $12,726.
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year,...
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $110,400 and then sells it to Watkins for $138,000. At the end of the year, Watkins still holds only $25,300 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method? Multiple Choice $1,518. 0 $8,418. 0 $6,318. 0 $11,118.
Saved Help Save & Exit Jubilee, Inc., owns 20 percent of JPW Company and applies the...
Saved Help Save & Exit Jubilee, Inc., owns 20 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $116,350 and then sells it to JPW for $179 000. At the end of the year, JPW still holds only $24,700 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment sing the equity method? Multiple Choice $10.429 $8,629. $1,729 $6.229 < Prev 2 of 8 Next >
Perez, Inc., applies the equity method for its 25 percent investment in Senior, Inc. During 2018,...
Perez, Inc., applies the equity method for its 25 percent investment in Senior, Inc. During 2018, Perez sold goods with a 40 percent gross profit to Senior, which sold all of these goods in 2018. How should Perez report the effect of the intra-entity sale on its 2018 income statement? Multiple Choice O Investment income should be reduced by 25 percent of the gross profit on the amount of intra-entity sales. No adjustment is necessary. Sales and cost of goods...
Advanced Accounting Ch 1 Q 3
Aaron, Inc., sold $120,000 in inventory to Hank Company during Year 10 for $200,000. Hank resold $85,000 of this merchandise in Year 10 with the remainder to be disposed of during Year 11. Assuming that Aaron owns 30 percent of Hank and applies the equity method, what journal entry is recorded at the end of Year 10 to defer the intra-entity gross profit?
Tiberend, Inc., sold $161,000 in inventory to Schilling Company during 2017 for $230,000. Schilling resold $113,000...
Tiberend, Inc., sold $161,000 in inventory to Schilling Company during 2017 for $230,000. Schilling resold $113,000 of this merchandise in 2017 with the remainder to be disposed of during 2018. Assuming that Tiberend owns 20 percent of Schilling and applies the equity method, what journal entry is recorded at the end of 2017 to defer the intra-entity gross profit? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round...
5. Ally, Inc. bought 40% of Blake Company on January 1, 2020 for $400,000. The equity...
5. Ally, Inc. bought 40% of Blake Company on January 1, 2020 for $400,000. The equity method was used. No amortization was required. In 2020, Blake shipped to Ally merchandise with a cost of $25,000 and a selling price of $30,000. One-fourth of the merchandise remained in Ally's inventory at year-end and was sold in 2021. In 2021, Blake received merchandise from Ally, who recorded a gross profit of $20,000 on the sale. One-third of the merchandise remained in ending...
Smith Company holds 20% of the outstanding shares of Leef Greeting Cards and applies the equity...
Smith Company holds 20% of the outstanding shares of Leef Greeting Cards and applies the equity method of accounting. For the current year, Leef reports earnings of $100,000 and pays cash dividends of $22,000. During the current year, Leef acquired inventory for $60,000, which was then sold to Smith for $100,000. At the end of the current year, Smith continues to hold merchandise with a transfer price of $30,000. Assuming no amortization expense related to this investment, what Equity in...
Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $133,600 and then sells it to Watkins for $167,000. At the end of the year, Watkins still holds only $27,000 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method?
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $54,000 and then sells it to Watkins for $90,000. At the end of the year, Watkins still holds only $20,000 of merchandise. What amount of unrealized gross profit must Panner defer in reporting this investment using the equity method? a. $2,400 b. $4,800. c. $8,000. d. $10,800
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $93,100 and then sells it to Watkins for $133,000. At the end of the year, Watkins still holds only $21,400 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method? Multiple Choice o $10,026. • $1,926. O $4,926. o $12,726.
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $110,400 and then sells it to Watkins for $138,000. At the end of the year, Watkins still holds only $25,300 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method? Multiple Choice $1,518. 0 $8,418. 0 $6,318. 0 $11,118.
Saved Help Save & Exit Jubilee, Inc., owns 20 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $116,350 and then sells it to JPW for $179 000. At the end of the year, JPW still holds only $24,700 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment sing the equity method? Multiple Choice $10.429 $8,629. $1,729 $6.229 < Prev 2 of 8 Next >
Perez, Inc., applies the equity method for its 25 percent investment in Senior, Inc. During 2018, Perez sold goods with a 40 percent gross profit to Senior, which sold all of these goods in 2018. How should Perez report the effect of the intra-entity sale on its 2018 income statement? Multiple Choice O Investment income should be reduced by 25 percent of the gross profit on the amount of intra-entity sales. No adjustment is necessary. Sales and cost of goods...
Tiberend, Inc., sold $161,000 in inventory to Schilling Company during 2017 for $230,000. Schilling resold $113,000 of this merchandise in 2017 with the remainder to be disposed of during 2018. Assuming that Tiberend owns 20 percent of Schilling and applies the equity method, what journal entry is recorded at the end of 2017 to defer the intra-entity gross profit? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round...
5. Ally, Inc. bought 40% of Blake Company on January 1, 2020 for $400,000. The equity method was used. No amortization was required. In 2020, Blake shipped to Ally merchandise with a cost of $25,000 and a selling price of $30,000. One-fourth of the merchandise remained in Ally's inventory at year-end and was sold in 2021. In 2021, Blake received merchandise from Ally, who recorded a gross profit of $20,000 on the sale. One-third of the merchandise remained in ending...
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