Cayman Inc., brought 30% Maya Company on January 1, 2013, for $450,000. The equity method of accounting was used. The book value and fair value of the net assets of Maya on that date were $1,500,000. Maya began supplying inventory to Cayman as follows: Year Cost to Maya Transfer Price Amount Held at year-End 2013 $30,000 2014 $48,000 $45,000 $80,000 $9,000 $20,000 Maya reported a net income of $100,000 in 2013 and $120,000 in 2014 while paying $40,000 in dividends each year. What is the amount of unrealized inventory profit to be deferred on December 31, 2014? a. $8,000 b. $3,600 c. $4,000 d. $1,500 e. $2,400

Cayman Inc., brought 30% Maya Company on January 1, 2013, for $450,000. The equity method of accounting was used. The book value and fair value of the net assets of Maya on that date were $1,500,000. Maya began supplying inventory to Cayman as follows: Year Cost to Maya Transfer Price Amount Held at year-End 2013 $30,000 2014 $48,000 $45,000 $80,000 $9,000 $20,000 Maya reported a net income of $100,000 in 2013 and $120,000 in 2014 while paying $40,000 in dividends each year. What is the amount of unrealized inventory profit to be deferred on December 31, 2014? a. $8,000 b. $3,600 c. $4,000 d. $1,500 e. $2,400

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

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