Saved Help Save & Exit ation James Corporation owns 80 percent of Carl Corporati

Question

Saved Help Save & Exit ation James Corporation owns 80 percent of Carl Corporation's common stock. During October, Carl sold merchandise to James for $170,000. At December 31, 50 percent of this merchandise remains in James's inventory. Gross profit percentages were 30 percent for James and 40 percent for Carl. The amount of intra -entity gross profit in inventory at December 31 that should be eliminated in the consolidation process is Multiple Choice $68,000. $27.200 $25,500 $34,000 Prev 31 of 50 Next > ere to search

Explanation / Answer

ANSWER = D) $34000

Remaining Inventory = $ 170000 * 50% = 85000

(Carl) Unrealized gross profit – 85,000 x 40% = 34,000

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