Question
Pixie Corporation sells a variety soda products and owns 80% of the stock of Sparkle Inc., which produces flavor syrups. During 20X8, Sparkle sold syrup
Pixie Corporation sells a variety soda products and owns 80% of the stock of Sparkle Inc., which produces flavor syrups. During 20X8, Sparkle sold syrup products to Pixie for $180,000, which it had produced for $120,000. Pixie sold $150,000 of the products in 20X8 and the remainder in 20X9. In addition to the purchase in 20X8, during 20X9, Sparkle sold syrup products costing $160,000 to Pixie for $240,000, of which $90,000 were resold before year-end.
What is the gross profit value of remaining inventory from the above purchases in 20X8 and 20X9?
| a. | 20X8: $10,000; 20X9: $60,000 | |
| b. | 20X8: $10,000; 20X9: $50,000 | |
| c. | 20X8: $20,000; 20X9: $50,000 | |
| d. | 20X8: $30,000; 20X9: $150,000
|
What is the gross profit percentage for 20X8 related to the intercompany purchase?
| a. | 66.67% | |
| b. | 20% | |
| c. | 35% | |
| d. | 33.33% |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started