Martindale Company, a 100% owned subsidiary of Weisman Corporation, sells inventory to Weisman at a 20% profit on selling price. The following data are available pertaining to inter-company purchases by Weisman: Inter-company sales: 2020: 2021: 2022: $18,000 $19,400 $21,500 Unsold at year end (based on selling price): 2020: 2021: 2022: $4,000 $6,000 $8,000 Martindale's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Weisman received dividends from Martindale of $25,000 for 2020 and 2021, and $30,000 for 2022. Assume Weisman uses the equity method to account for its investment in Martindale. What would be the debit to retained earnings regarding the 2020 consolidation entry related to the unrealized inventory profit? Select one: A. $1,200 × B. $-0- C. $4,000 D $ 800
Martindale Company, a 100% owned subsidiary of Weisman Corporation, sells inventory to Weisman at a 20% profit on selling price. The following data are available pertaining to inter-company purchases by Weisman: Inter-company sales: 2020: 2021: 2022: $18,000 $19,400 $21,500 Unsold at year end (based on selling price): 2020: 2021: 2022: $4,000 $6,000 $8,000 Martindale's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Weisman received dividends from Martindale of $25,000 for 2020 and 2021, and $30,000 for 2022. Assume Weisman uses the equity method to account for its investment in Martindale. What would be the debit to retained earnings regarding the 2020 consolidation entry related to the unrealized inventory profit? Select one: A. $1,200 × B. $-0- C. $4,000 D $ 800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
am.113.
Transcribed Image Text:Martindale Company, a 100% owned subsidiary of Weisman Corporation, sells inventory to Weisman at a 20% profit on
selling price. The following data are available pertaining to inter-company purchases by Weisman:
Inter-company sales:
2020:
2021:
2022:
$18,000
$19,400
$21,500
Unsold at year end (based on selling price):
2020:
2021:
2022:
$4,000
$6,000
$8,000
Martindale's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Weisman
received dividends from Martindale of $25,000 for 2020 and 2021, and $30,000 for 2022.
Assume Weisman uses the equity method to account for its investment in Martindale. What would be the debit to
retained earnings regarding the 2020 consolidation entry related to the unrealized inventory profit?
Select one:
A. $1,200 ×
B. $-0-
C. $4,000
D
$ 800
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