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Pelga Company routinely receives goods from its 80%-owned subsidiary. Swede Corporation. In 2014, Swede sold merchandise that cost $80,000 to Pelga for $100,000. Half of
Pelga Company routinely receives goods from its 80%-owned subsidiary. Swede Corporation. In 2014, Swede sold merchandise that cost $80,000 to Pelga for $100,000. Half of this merchandise remained in Pelga's December 31, 2014 inventory. This inventory was sold in 2015. During 2015, Swede sold merchandise that cost $160,000 to Pelga for $200,000. $62.500 of the 2015 merchandise inventory remained in Pelga's December 31. 2015 inventory. Selected income statement information for the two affiliates for the year 2015 was as follows: Pelga Swede Sales Revenue $500,000 $400.000 Cost of Goods Sold 400,000 320,000 Gross profit $100,000 $80,000 What amount of unrealized profit did Pelga Company have at the end of 2015? $10,000 $12,500 $50,000 $62,500
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