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4. Deluca has decided that its production and sales for the Eastern Canada area would be more efficient and e. fective if the company transferred

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4. Deluca has decided that its production and sales for the Eastern Canada area would be more efficient and e. fective if the company transferred all of its assets in that region to Irving Corporation, an unre.ated Hali. ax-based company. Deluca has negotiated to sell the assets to Irving Corporation for $1 200 VO0. effective 1 Deceiver do-4. the equipment's current book value is $900 0Jv. Effective 2 January ev-5, Irving Corporation will produce Deluca s produc s and also will maintain the inventor, Irving will manage the sales force for the eastern region, although all sales and accounts receivable will continue to be invoiced and collected by Deluca. Deluca will reimburse Irving Corporation for the cost of production and direct sales expense plus 30> of the gross margin

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