A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year? A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes. B. The gain remains as reported since the amount would be immaterial. C. Any remaining gain is reported as a contra balance to the Purchase account. D. Any remaining is reported as a contra balance to the Branch account. Answer please
A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year? A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes. B. The gain remains as reported since the amount would be immaterial. C. Any remaining gain is reported as a contra balance to the Purchase account. D. Any remaining is reported as a contra balance to the Branch account. Answer please
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year?
A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes.
B. The gain remains as reported since the amount would be immaterial.
C. Any remaining gain is reported as a contra balance to the Purchase account.
D. Any remaining is reported as a contra balance to the Branch account.
Answer please
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