Wathan Inc

question 90

Essay

Wathan Inc.sold $180,000 in inventory to Miller Co.during 2017, for $270,000.Miller resold $108,000 of this merchandise in 2017 with the remainder to be disposed of during 2018.
Required:
Assuming Wathan owns 25% of Miller and applies the equity method, prepare the journal entry Wathan should have recorded at the end of 2017 to defer gross profit on intra-entity inventory sales.

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Definitions:

Alkylating Agents

Chemicals that add alkyl groups to DNA or proteins, often used as medications in chemotherapy or as chemical weapons.

Sulfur Analogues

Compounds similar in structure to another compound but with sulfur atoms replacing oxygen or nitrogen atoms, often used in medicinal chemistry to adjust the properties of drugs.

Ethers

A class of organic compounds characterized by an oxygen atom connected to two alkyl or aryl groups, used as solvents and in the synthesis of other chemicals.

Diethyl Ether

An organic compound, commonly used as a solvent, with the formula \(C_2H_5OC_2H_5\).