Xavier Inc. (Xavier) owns 80% of Young Inc. (Young). During 2023, Xavier sold inventory to Young for $12,000. Thirty percent (30%) of this inventory remained in Y's warehouse at year end. Young sold inventory to Xavier for $6,000. 40% of this inventory remained in Xavier's warehouse at year end. Both companies are subject to a tax rate of 40%. The gross profit percentage on sales is 20% for both companies. Unless otherwise stated, assume Xavier uses the cost method to account for its investment in Young.

Q1- What is the after-tax dollar value of Xavier's realized profits during the year on its sales to Young?

Multiple Choice

$1,008

$720

$432

$672

Q2- What is the after-tax dollar value of Xavier's unrealized profits during the year on its sales to Young?

Multiple Choice

$1,008

$720

$432

$672