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Suppose that company XXX Acquired 55% of company YYY and the assets and liabilities of YYY were equal to their fair values. YYY sole merchandise

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Suppose that company XXX Acquired 55% of company YYY and the assets and liabilities of YYY were equal to their fair values. YYY sole merchandise to XXX for 50,000 and record the following: Account Receivable 50,000 Sales Revenue 50,000 The sales of YYY is at 125% of the cost. One- fourth of this merchandise remained in the XXX's inventory at year-end. A working paper entry to eliminate unrealized profits from consolidated inventory would include a credit to Inventory in the amount of: A) 2,500 B) 2,000 C) 10,000 D) 8,000

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