Realized Profit Calculation — Two Years of Downstream Transfers In 2007, Soxa Inc., a 100%-

owned subsidiary of Poxa Inc., resold for $90,000 inventory it had purchased in 2006 for $70,000 from Poxa. Poxa’s cost was $40,000. Also in 2006, Poxa sold inventory costing $250,000 to Soxa for $400,000. At the end of 2007, Soxa reported $72,000 of this 2007 intercompany-acquired in¬

ventory in its balance sheet, the remaining 2007 intercompany-acquired inventory having been resold for $500,000.

1. How much intercompany profit was realized in 2007?

2. For Module I only: Prepare the general ledger adjusting entry(ies) pertaining to unrealized in¬

tercompany profit at the end of 2007.