Pruitt Company Owns 80% of Stoney Company's Common Stock

question 34

Multiple Choice

Pruitt Company owns 80% of Stoney Company's common stock.During 2014, Stoney sold $400,000 of merchandise to Pruitt.At December 31, 2014, one-fourth of the merchandise remained in Pruitt's inventory.In 2014, gross profit percentages were 25% for Pruitt and 30% for Stoney.The amount of unrealized intercompany profit that should be eliminated in the consolidated statements is

• A)$80,000.
• B)$24,000.
• C)$30,000.
• D)$25,000.

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Definitions:

Purchasing Intentions

The likelihood or propensity of consumers to buy a product or service in the near future.

Attitudes of Others

The perceptions, beliefs, or feelings held by individuals apart from oneself, which can influence interpersonal interactions and dynamics.

Perceived Risk

The potential that a consumer sees in a purchase decision that could lead to a loss or negative outcome, influencing their buying behavior.

Purchase Satisfaction

The level of contentment of a customer with the experience and outcomes of buying a product or service.