Anderson Company, a 90% Owned Subsidiary of Philbin Corporation, Transfers

question 118

Multiple Choice

Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020. Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends.
For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2021 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2020 intra-entity transfer of merchandise?

• A)$240
• B)$300.
• C)$2,000.
• D)$1,600.
• E)$270.

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Definitions:

Beetle

Insect belonging to the order Coleoptera, distinguished by their hard exoskeletons, wing cases (elytra), and wide variety of sizes and colors, making them one of the most diverse groups of insects.

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Evolutionary Relationships

The connections between different species or groups of organisms based on their common ancestry and evolutionary history.

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The process or act of giving a name to someone or something.