Question Answer saved Marked out of Accounting for the Effects on Equity Investments of Intercompany Sales of Inventory When Less Than 100% of the Investee Is Owned Assume an investor sells parts, which originally cost $840, to an investee for $1,120. Also assume 70% of the parts inventories remain on the investee's balance sheet at the end of the period, and that the investor has significant influence over the investee based on its 25% ownership interest. Required Provide the journal entry to defer the recognition of gross profit on the inventories that remain on the investee's balance sheet. Debit Credit 0 a O (to record the deferral of gross profit on inventory sale.) Next >