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

question 13

Multiple Choice

Pruitt Company owns 80% of Stoney Company's common stock. During 2017, Stoney sold $400,000 of merchandise to Pruitt. At December 31, 2017, one-fourth of the merchandise remained in Pruitt's inventory. In 2017, 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:

Home Sign

A system of gestures developed by deaf children who lack exposure to a formal sign language, allowing them to communicate with their family.

Grammatical Distinctions

Differences in language that are made on the basis of grammar, including aspects like tense, mood, voice, and case.

Left Hemisphere Damage

Describes injury or harm to the left side of the brain, often affecting language, logical thinking, and analytical abilities.

Right Hemisphere Damage

Denotes injury or dysfunction in the right hemisphere of the brain, affecting spatial abilities, facial recognition, and certain aspects of language processing.