Investor owns 30% of Investee and applies the equity method. In 2016, Investor sells merchandise costing $220,000 to Investee for $290,000. Investee's ending inventory includes $50,000 purchased from Investor. Calculate the amount of unrealized gross profit that must be deferred in the equity method entry.

Investor owns 30% of Investee and applies the equity method. In 2016, Investor sells merchandise costing $220,000 to Investee for $290,000. Investee's ending inventory includes $50,000 purchased from Investor. Calculate the amount of unrealized gross profit that must be deferred in the equity method entry.

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

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 23E

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