Gargiulo Company, a 90% Owned Subsidiary of Posito Corporation, Sells

question 3

Multiple Choice

Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012. $\begin{array}{lrrr}&2012&2013&2014\\\text { Purchases by Posito } & \$ 8,000 & \$ 12,000 & \$ 15,000 \\\text { Ending inventory on Posito's books } & 1,200 & 4,000 & 3,000\end{array}$ Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends. $$\begin{array} { l c c c } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 3 } & \mathbf { 2 0 1 4 } \\\text { Gargiulo's net income } & \mathbf { \$ 7 0 , 0 0 0 } & \mathbf { \$ 8 5 , 0 0 0 } & \mathbf { \$ 9 4 , 0 0 0 } \\\text { Dividends paid by Gargiulo } & 10,000 & 10,000 & 15,000\end{array}$$ For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2013 consolidation worksheet entry with regard to the unrealized gross profit of the 2012 intra-entity transfer of merchandise?

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

Acknowledge the influence of cultural values on reluctance to discuss individual problems and seek help.

Understand the impact of communalist orientation on mental health and the preferred types of therapies among South Asian Americans.

Understand the concept of proper presentment and notice requirements in negotiable instruments.

Grasp the nuances of endorser liability and the order of liability among endorsers and makers of promissory notes.

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Definitions:

Enforceable

Capable of being imposed or carried out by legal process or by force; applicable to obligations or contracts that can be legally compelled.

Contract of Adhesion

A standard-form agreement prepared by one party, with the other party having little to no ability to negotiate more favorable terms.

Boilerplate Provisions

Standardized legal language used in contracts, agreements, and legal documents that is typically not negotiated.

Exculpatory Clauses

Exculpatory clauses are contractual provisions that relieve one party from liability for harm caused during the execution of the contract, often under specific conditions.