Solution to Chapter 5 Sample Quiz

Solution to Chapter 5 Sample Quiz - Indiana University of...

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Indiana University of Pennsylvania Department of Accounting ACCT 401/501: Advanced Accounting Dr. Rahman Solution to Sample Quiz for Chapter 5 Part I. 1. C 2. C 3. A 2008 combined sales $920,000 Less: 2008 intercompany sales (50,000) Consolidated sales $870,000 4. A Selling price $50,000 Less: Cost of sales 40,000 Original unrealized profit 10,000 Unsold percentage 30% Unrealized profit $ 3,000 5. A Eagle net Income $180,000 Add: Flyway’s Net income $76,000 X .8 60,800 Deduct: Unrealized profit in Ending Inventory (3,000 ) $237,800. 6. A 7. D $300,000 + $180,000 - $3,000 = $477,000. 8. A $500,000 + $400,000 - $200,000 = $$700,000 - $20,000. 9. B $120,000 X .8 = $96,000 - $20,000 = $76,000. 10. D 11. C $520,000 + $12,500 - $10,000 = $522,500 12. B $62,500 X .2 = $12,500. 13. A
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Part II Requirement 1 Unrealized profit in inventory: $132,000 – ($132,000/1.2) = $ 22,000 Requirement 2 Income from Salt for 2009: Share of Salt’s income ($880,000 x 60%) $ 528,000 Less: Unrealized profit in ending inventory
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Solution to Chapter 5 Sample Quiz - Indiana University of...

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