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Gargiulo Company, a 90% owned subsidiary of Posito Corporation, transfers inventory to Posito at a 25% pre profit rate. The following data are available pertaining
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, transfers inventory to Posito at a 25% pre profit rate. The following data are available pertaining specifically to Posito's intra-entity purchases from Gargiulo. Gargiulo was acquired on January 1, 2017. 2017 2018 2019 Purchases by Posito Ending inventory on Posito's books S 12,000 8,000 S 15,000 1,200 4,000 3,000 F5 Assume the equity method is used dividends The following data are available pertaining to Gargiulo's income and Nu Lo- 2017 2018 2019 Gargiulo's net income Dividends paid by Gargiulo 70,000 S 85,000 94,000 10,000 10,000 15,000 5) For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2019 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2018 intra-entity transfer of merchandise? A) $3,000. C) $2,400 B) $900. D) $800 E) S1,000 6) For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2017 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2017 intra-entity transfer of merchandise? A) $240 B) $270. ) SO D) $300. E) $1,600. bo (200 X a590 30
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