A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year? A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes. B. The gain remains as reported since the amount would be immaterial. C. Any remaining gain is reported as a contra balance to the Purchase account. D. Any remaining is reported as a contra balance to the Branch account. Answer please
A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year? A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes. B. The gain remains as reported since the amount would be immaterial. C. Any remaining gain is reported as a contra balance to the Purchase account. D. Any remaining is reported as a contra balance to the Branch account. Answer please
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 37BE: Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was...
Related questions
Question
A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year?
A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes.
B. The gain remains as reported since the amount would be immaterial.
C. Any remaining gain is reported as a contra balance to the Purchase account.
D. Any remaining is reported as a contra balance to the Branch account.
Answer please
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,