Use the Following Information to Answer the Question(s) Below

question 29

Multiple Choice

Use the following information to answer the question(s) below..

Pelga Company routinely receives goods from its 80%-owned subsidiary, Swede Corporation. In 2014, Swede sold merchandise that cost $80,000 to Pelga for $100,000. Half of this merchandise remained in Pelga's December 31, 2014 inventory. This inventory was sold in 2015. During 2015, Swede sold merchandise that cost $160,000 to Pelga for $200,000. $62,500 of the 2015 merchandise inventory remained in Pelga's December 31, 2015 inventory. Selected income statement information for the two affiliates for the year 2015 was as follows:

-What amount of unrealized profit did Pelga Company have at the end of 2015?

• A)$10,000
• B)$12,500
• C)$50,000
• D)$62,500

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Definitions:

Vestibular Sensation

The sense related to balance and spatial orientation, arising from the inner ear and processed by the brain's vestibular system.

Somatosensory Sensation

The bodily sensations of touch, temperature, body position, and pain, processed by the somatosensory system.

Vision

The ability of the eye to detect and interpret light and shapes, forming images.

Semicircular Canals

Three fluid-filled tubes in the inner ear that are part of the vestibular system, helping to maintain balance and spatial orientation.