(TCO A) Steven Inc. sold $219,000 in inventory to Thomas Co. during 20X0 for $300,000. Thomas resold $100,000 of this merchandise in 20X0 with the remainder to be disposed of during 20X1. Assume Steven owns 28% of Thomas and applies the equity method. Required: (1) Determine Steven's share of the unrealized gain at the end of 20X0. (2) Prepare the journal entry Steven should record at the end of 20X0 to defer the unrealized intra-entity inventory profit.
(TCO A) Steven Inc. sold $219,000 in inventory to Thomas Co. during 20X0 for $300,000. Thomas resold $100,000 of this merchandise in 20X0 with the remainder to be disposed of during 20X1. Assume Steven owns 28% of Thomas and applies the equity method. Required: (1) Determine Steven's share of the unrealized gain at the end of 20X0. (2) Prepare the journal entry Steven should record at the end of 20X0 to defer the unrealized intra-entity inventory profit.
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 19E
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(TCO A) Steven Inc. sold $219,000 in inventory to Thomas Co. during 20X0 for $300,000. Thomas resold $100,000 of this merchandise in 20X0 with the remainder to be disposed of during 20X1.
Assume Steven owns 28% of Thomas and applies the equity method.
Required:
(1) Determine Steven's share of the unrealized gain at the end of 20X0.
(2) Prepare the
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