On January 1, 2021, Daniel Corp

question 106

Multiple Choice

On January 1, 2021, Daniel Corp. acquired 80% of the voting common stock of Phillips Inc. During the year, Daniel sold to Phillips for $315,000 goods that cost $210,000. At year-end, Phillips owned 30% of the goods transferred. Phillips reported net income of $305,000, and Daniel's net income was $986,000. Daniel decided to use the equity method to account for this investment. What amount of intra-entity gross profit would be deferred in 2021?

• A) $21,000.
• B) $25,200.
• C) $31,500.
• D) $84,000.
• E) $105,000.

Understand genetic replication and the potential for errors.

Understand the concepts of adjusting entries and their effects on financial statements.

Recognize the purpose and structure of a trial balance, and its role in preparing financial reports.

Define and calculate depreciation, including straight-line method, and understand its impact on the balance sheet.

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Definitions:

Four-Legged Animals

Animals that have four limbs used for walking, running, or other forms of locomotion.

Existing Conception

Preconceived ideas or notions that an individual already holds about a specific topic or subject before acquiring new information.

Assimilation

In psychology, a cognitive process where new information is integrated into preexisting frameworks or schemas.

Mental Activities

Tasks or operations performed by the mind, such as thinking, learning, and memory.