Diller Owns 80% of Lake Company Common Stock

question 14

Multiple Choice

Diller owns 80% of Lake Company common stock. During October 20X7, Lake sold merchandise to Diller for $300,000. On December 31, 20X7, one-half of this merchandise remained in Diller's inventory. For 20X7, gross profit percentages were 30% for Diller and 40% for Lake. The amount of unrealized profit in the ending inventory on December 31, 20X7 that should be eliminated in consolidation is ____.

• A)$80,000
• B)$60,000
• C)$32,000
• D)$30,000

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Definitions:

Pleural Membranes

Thin layers of tissue that envelop the lungs and line the interior wall of the chest cavity, facilitating smooth movement of the lungs during breathing.

Ventilation

The process of moving air in and out of the lungs to facilitate gas exchange with the internal environment, particularly to remove carbon dioxide and bring in oxygen.

Thoracic Cavity

An anatomical space located within the chest, bounded by the ribs, sternum, and diaphragm, housing the lungs and heart.

Alveoli

Tiny air sacs in the lungs where gas exchange between the air and blood takes place.