Yukon CoAcquired 75% Percent of the Voting Common Stock of Ontario

question 106

Multiple Choice

Yukon Co.acquired 75% percent of the voting common stock of Ontario Corp.on January 1, 2018.During the year, Yukon made sales of inventory to Ontario.The inventory cost Yukon $260,000 and was sold to Ontario for $390,000.Ontario held $60,000 of the goods in its inventory at the end of the year.The amount of intra-entity gross profit for which recognition is deferred, and should therefore be eliminated in the consolidation process at the end of 2018, is:

• A) $15,000.
• B) $20,000.
• C) $32,500.
• D) $30,000.
• E) $110,000.

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Definitions:

Gastropods

A class of mollusks typically having a one-piece coiled shell and including snails, slugs, and whelks, which are primarily marine, but also found in freshwater and terrestrial environments.

Gastrovascular Cavity

A central cavity in certain simple organisms, such as cnidarians, serving both digestive and circulatory functions.

Tentacle

Flexible, often elongated appendages found in some animals, like octopuses and jellyfish, used for sensation, locomotion, and feeding.

Cnidarians

Cnidarians are a phylum of aquatic invertebrates that include jellyfish, corals, and sea anemones, characterized by a simple body plan with a mouth surrounded by tentacles.