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year end is subsequently sold in the following year to an unrelated party. investment. National sells inventory to Cub as listed in the table below. Inventory remaining at Cub Incorporated owns 30% of National and applies the equity method of accounting for this Inventory Transfer Cost $40,500 Price $90,000 The amount of the gross profit Cub deferred in 2020, recognized in 2021 is: Year 2020 A. $1,650 B. $1,800 C. $5,500 D. $1,350 Inventory Remaining None of the above. $10,000 (at Transfer Price)

year end is subsequently sold in the following year to an unrelated party. investment. National sells inventory to Cub as listed in the table below. Inventory remaining at Cub Incorporated owns 30% of National and applies the equity method of accounting for this Inventory Transfer Cost $40,500 Price $90,000 The amount of the gross profit Cub deferred in 2020, recognized in 2021 is: Year 2020 A. $1,650 B. $1,800 C. $5,500 D. $1,350 Inventory Remaining None of the above. $10,000 (at Transfer Price)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1) Investment. National sells inventory to Cub as listed in the table below. Inventory remaining at year end is subsequently sold in the following year to an unrelated party. Cub Incorporated owns 30% of National and applies the equity method of accounting for this Year 2020 Inventory Cost $40,500 The amount of the gross profit Cub deferred in 2020, recognized in 2021 is: A. $1,650 B. $1,800 Transfer Price $90,000 C. $5,500 D. $1,350 E. None of the above. Inventory Remaining $10,000 (at Transfer Price)
Transcribed Image Text:1) Investment. National sells inventory to Cub as listed in the table below. Inventory remaining at year end is subsequently sold in the following year to an unrelated party. Cub Incorporated owns 30% of National and applies the equity method of accounting for this Year 2020 Inventory Cost $40,500 The amount of the gross profit Cub deferred in 2020, recognized in 2021 is: A. $1,650 B. $1,800 Transfer Price $90,000 C. $5,500 D. $1,350 E. None of the above. Inventory Remaining $10,000 (at Transfer Price)
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