Luffman Inc. owns 30% of Bruce Inc. and appropriately applies the equity method. During the current year, Bruce bought inventory costing $52,000 and then sold it to Luffman for $80,000. At year-end, all of the merchandise had been sold by Luffman to other customers. What amount of gross profit on intra-entity sales must be deferred by Luffman?
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![Luffman Inc. owns 30% of Bruce Inc. and appropriately applies the equity method. During the current year, Bruce bought inventory
costing $52,000 and then sold it to Luffman for $80,000. At year-end, all of the merchandise had been sold by Luffman to other
customers. What amount of gross profit on intra-entity sales must be deferred by Luffman?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F974b2998-f7ed-4fa1-b587-bcfe78fbc312%2Ffa4823e3-6ac6-4229-8560-9a588e1c11e7%2Frp5zrnv_processed.png&w=3840&q=75)
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- Camille, Inc., sold $147,000 in inventory to Eckerle Company during 2020 for $245,000. Eckerle resold $109,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit?Par Inc owns 77.11% of Sub Corp. During the year, Par sold inventory to Sub for $79,271. Exactly 47.83% of this inventory remained in Y's warehouse at year end. Sub sold inventory to Par for $39,636 of which 39.47% remained in X's warehouse at year end. Both companies are subject to a tax rate of 28.35%. The gross profit percentage on sales is 20% for both companies. What is the after-tax dollar value of Par's unrealized profits during the year on its sales to Sub? a. $5,433 b. $5,977 c. $5,705 d. $5,569 e. $5,841Jubilee, Inc., owns 30 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $93,100 and then sells it to JPW for $133,000. At the end of the year, JPW still holds only $21,400 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment using the equity method? Multiple Choice $4,926. $1,926. $12,726. $10,026.
- Palm Company owns 100% of Soso Company. During year X1, Soso sold merchandise costing $50,000 to Palm for $80,000. As of 12/31/X1, 40% of the merchandise remained in Palm's inventory. Assuming that Soso reported a $100,000 net income an paid $20,000 of dividends in year X1, how much investment income should should Palm recognize in year X1?Camille, Inc., sold $130,000 in inventory to Eckerle Company during 2020 for $250,000. Eckerle resold $89,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 20 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $54,000 and then sells it to Watkins for $90,000. At the end of the year, Watkins still holds only $20,000 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method?a. $2,400b. $4,800c. $8,000d. $10,800
- Camille, Incorporated, sold $147,000 in inventory to Eckerle Company during 2023 for $245,000. Eckerle resold $109,000 of this merchandise in 2023 with the remainder to be disposed of during 2024. Required: Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2023 to defer the intra-entity gross profit? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. 1.Record the entry at the end of 2023 to defer unrealized gross profit.Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the perpetual inventory method, and Virginia decided to use the partial equity method to account for this investment. During 2020, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By the end of 2020, Stateside had sold 75% of the goods to outside parties for $420,000 cash. Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2020.Listless Co. owns 20% of Weak Inc. and uses the equity method. In 20x1, Weak sells inventory to Listless fro P400,000 with a 60% gross profit on the transaction. The inventory remains unsold during 20x1 and was sold by Listless to external parties only in 20x2. Listless income tax rate is 30%. Weak reports profit of P4,000,000 and P4,800,000 on December 31, 20x1 and 20x2, respectively. How much is the share in the profit of associate in 20x1?
- Tara Company owns 30% of Hawkins, Incorporated and applies the equity method. During the current year, Hawkins buys inventory costing $400,000 and sells it to Tara for $500,000. At the end of the year, only 25% of this merchandise is still being held by Tara. What amount of unrealized gain must be deferred by Hawkins in reporting on the equity method?Braviary Corp. acquired a 70% interest in Vullaby Company in 20A. For the year ended December 31, 20A and 20B, Vullaby Company reported an income of P160,000 and P180,000, respectively. During 20A, Vullaby sold merchandise to Braviary Corp. for P20,000 at a profit of P4,000. The merchandise was later resold by Braviary Corp. to outsider for P30,000 during 20B. For consolidation purposes, what is the minority interest's share of Vullaby's net income for 20A and 20B, respectively. * A. P49,200 and P52,800 B. Answer not given C. P53,200 and P50,000 D. P46,800 and P55,200 E. P48,000 and P54,000L Company owns 30% of S Company’s common stock which gives it the ability to apply significant influence and thus uses the equity method of accounting for its investment. During 2020 L Company sold inventory costing $120,000 to S company for $200,000. Also during 2020 S company resold $85,000 of this inventory to third parties. What journal entry would L Company make at the end of 2020 to defer the intra-entity gross profit?