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.

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Definitions:

Circulatory System

The circulatory system is the body's network of organs and vessels through which blood and lymph circulate, delivering nutrients and oxygen to cells and removing waste products.

Four-chambered Heart

A type of heart that consists of two atria and two ventricles, allowing complete separation of oxygenated and deoxygenated blood, commonly found in mammals and birds.

Circulatory System

The body system responsible for the flow of blood, nutrients, oxygen, carbon dioxide, and other substances to and from cells.

Mammalian

Relating to mammals, a class of warm-blooded vertebrate animals characterized by the presence of mammary glands which females use to feed their young.