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 unrealized profits in the year end 2018 and 2019 inventories were: a. 100K and 125K respectively. b. 800K and 100K respectively. c. 20K and 25K respectively. d.16K and 20K respectively
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 unrealized profits in the year end 2018 and 2019 inventories were: a. 100K and 125K respectively. b. 800K and 100K respectively. c. 20K and 25K respectively. d.16K and 20K respectively
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 unrealized profits in the year end 2018 and 2019 inventories were:
a. 100K and 125K respectively.
b. 800K and 100K respectively.
c. 20K and 25K respectively.
d.16K and 20K respectively
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