Ice Corporation owns 30% of Idea Company and applies the equity method. In 2XX0, Ice Corp. sellsmerchandise costing $288,000 to Idea for $360,000. Idea's ending inventory includes $60,000 purchasedfrom Ice.Which of the following is the correct equity method entry to record the realization of the gross profit in2XX1?Select one:O a.OEquity InvestmentCost of Goods Soldb.Equity IncomeEquity InvestmentC.d.Equity IncomeDebit Credit60,000Equity Investment 3,600Equity IncomeEquity Investment60,000Debit Credit3,600Debit Credit3,6003,600Debit Credit60,00060,000

Gross profit is a measure of a company's financial health and performance. It represents the amount…

Answered: Ice Corporation owns 30% of Idea…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Volley corporation owns an 80% interest in Basket corporation acquired several years ago. Basket regularly sells merchandise to experience at 125% of studies cost. Gross profit data for Volley and Basket for the year 2019 are as follows: Volley Basket Sales 1,000,000 800,000 Cost of Goods Sold 800,000 640,000 Gross Profit 160,000 160,000 During 2019 Volley purchased inventory items from Basket and a transfer price of 400,000. Volley December 31 2018 and 2019 inventory include goods acquired from Basket of 100,000 and 125,000 respectively. The consolidated cost of goods sold of Volley and subsidiary for 2019 was: a. 1,024,000 b. 1,045,000 c. 1,052,800 d. 1,056,000
Everest acquired assets and liabilities of Cola for Cola's book value at the balance sheet date. At that date, Everest's inventory had a book value and market value of P65,000 and P80,000, respectively while Cola's inventory had a book and market value of P25,000 and P25,000, respectively. What amount of inventory would appear on the balance sheet? (do not use comma on the answer. Follow this format: P1250 000)
12 )
Pepper bought 70% of Salt on 1 July 2016. The following are the statements of profit or loss of Pepper and Salt for the year ended 31 March 2017. Pepper Salt GHS’000 GHS’000 Revenue 31,200 10,400 Cost of sales (17,800) (5,600) Gross profit 13,400 4,800 Operating expenses (8,500) (3,200) Profit from operations 4,900 1,600 Investment income 2,000 Profit before tax 6,900 1,600 Tax…
On January 1 Year 1, Apple Co. sold goods to Brown Inc. for $250,000 in exchange for a 5-year, zero-interest-bearing note with a face amount of $402,628. The note had an implicit rate of 10 percent. The goods have an inventory cost on Bear’s books of $125,000. What amount of revenue will be recognized on the Year 1 income statement as a result of this transaction?
3. The following records were taken from the books of the Company and its branch on December 31, 2021: (see image below) Expenses incurred by the HO is P382,000 and branch incurred P101,500. In 2021, home office billed the branch at 120% of cost which was lower by 5% than last year’s. The Company applies FIFO inventory system What is the a.combined net income and b. balance of the Unrealized Gain account?
Gil Co. purchased four items of inventory at a bulk price of P9,000,000. The fair value of each item of inventory purchased are as follows: A-P4,000,000, B-P3,000,000, C-P2,000,000, D – P1,000,000. How much is the cost to be allocated to Inventory C?
Company A markets only one product X. In the inventory of 31/12/20X5 it was found that there were 500 pieces of X in the warehouse at a cost of EUR 30 per piece. The net realisable market value of X was estimated at EUR 28 per piece but X also has a written non-cancellable agreement to sell 300 pieces of X to company B at EUR 31 per piece. At what value will X's stock be valued?In FY20X6 all the beginning inventory was sold. In particular, the 200 pieces that were valued to KAP were sold at € 35 per piece.Conduct the diaries resulting from the above events up to the calculation of gross profit?
Brooks Company purchases debt investments as trading securities at a cost of $71,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $90,000. Brooks sells a portion of its trading securities (costing $35,500) for $40,250 cash. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction.
Bla Limited sells inventory to its parent, Whi Limited at cost price plus 125% mark-up. • Closing inventories in the records of Whi Limited on 30 June 2022 amount to R157 500. • Net realisable value of inventory on hand in the books of Whi limited amounts to R107 500 on 30 June 2022. Ignore tax implications Required:Show how the journal entry would be recorded in the books of Whi Limited on 30 June 2022 in accordance with IAS 2. And also show pro forma consolidation journal for the group.
Volley corporation owns an 80% interest in Basket corporation acquired several years ago. Basket regularly sells merchandise to experience at 125% of studies cost. Gross profit data for Volley and Basket for the year 2019 are as follows: Volley Basket Sales 1,000,000 800,000 Cost of Goods Sold 800,000 640,000 Gross Profit 160,000 160,000 During 2019 Volley purchased inventory items from Basket and a transfer price of 400,000. Volley December 31 2018 and 2019 inventory include goods acquired from Basket of 100,000 and 125,000 respectively. The consolidated sales of Volley corporation and subsidiary for 2019 were: a. 1,800,000 b.1,425,000 c.1,400,000 d.1,240,000
15 )

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