The Following Information Pertains to Questions

question 52

Multiple Choice

The following information pertains to questions
Jones Corp owns 30% of Klein Inc for $250,000.During 2002,there were numerous intercompany inventory sales.During the year,Jones sold Inventory for $50,000 to Klein.At year-end,half of this Inventory was still in Klein's possession.Also during 2002,Klein sold Inventory for $60,000 to Jones.At year-end,20% of this Inventory was still in Jones' possession.During the year,Klein declared a net income and paid dividends in the amount of $20,000 and $5,000 respectively.Klein's fair values approximated its book values on the date of acquisition.Both companies price all sales at a 25% mark-up above cost.In addition,both companies are subject to an effective tax rate of 40%.
-What is the amount of unrealized after-tax profit from downstream sales deducted from the Investment in Klein account during 2002?

• A)$8,000
• B)$5,000
• C)$3,000
• D)Nil

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Leadership Emergence

The process by which individuals become recognized by a group as leaders, often based on qualities such as charisma, communication skills, and problem-solving abilities.

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To persuade an unwilling person to do something by using force or threats.

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