Question: 32 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?
Question: 32 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?
Financial Accounting Intro Concepts Meth/Uses
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ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 42P
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Transcribed Image Text:Question: 32
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?
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