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Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining
Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020. 2020 $8,000 2021 $12,000 2022 $15,000 Purchases by Philbin Ending inventory on Philbin's books 1,200 4,000 3,000 Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends. Anderson's net income Dividends paid by Anderson 2020 2021 2022 $70,000 $85,000 $94,000 10,000 10,000 15,000 Compute the equity in earnings of Anderson reported on Philbin's books for 2020. Multiple Choice O $63.000 $62,730 O $63,270 O $70,000. $62,700. O
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