Three questions:

a) P Company sold merchandise to a subsidiary for $64,000. Gross profit rate is 40%. At year end, 20% of this remains unsold. The tax rate is 30%. What is the before tax and after-tax unrealized profit in ending inventory?

Clearly indicate your answers as shown below:

Calculations:

Before tax unrealized profit:

After tax unrealized profit:

b) P Company sold merchandise to a subsidiary for $63,000. The mark-up on cost is 50%. At year end, 20% of this remains unsold. The tax rate is 30%. What is the before tax and after tax unrealized profit in ending inventory?

Clearly indicate your answers as indicated below:

Calculations:

Before tax unrealized profit:

After tax unrealized profit:

c) AB Company issued a 10 year, 5%, $2,000,000 bond paying interest twice a year at a market rate of 4.2%. What was the issue price?