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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
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 42P
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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?
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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