What Is the Amount of Unrealised Profit That Needs to Be

question 21

Multiple Choice

What is the amount of unrealised profit that needs to be eliminated at the end of the period,in the following situation,where Barker Limited is the parent of Corbett Limited? (Ignore the tax effect) Barker purchases 500 units of inventory for $20 each.Barker sells this entire inventory to Corbett at a mark up of 50 per cent.At the end of the period,100 units are on hand.

• A) $1,000.
• B) $2,000.
• C) $3,000.
• D) $5,000.
• E) $10,000.

Comprehend the accounting treatment and disclosure requirements for stock repurchases and conversions.

Understand the accounting and reporting requirements for stock-based compensation under current GAAP.

Understand the calculation of weighted average number of shares for basic earnings per share.

Know the compromise and choices offered to companies by SFAS No. 123 regarding stock options.

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Definitions:

Failure Analysis

The systematic investigation of a process, product, or system failure to identify the causes and suggest improvements.

Justification Reports

Documents that provide reasons and evidence to support particular decisions or proposals.

Feasibility Reports

Documents that evaluate the practicality and viability of a proposed project or idea.

Due Diligence

A comprehensive appraisal or investigation undertaken to evaluate the risks and merits before entering into an agreement or transaction.