REFERENCE: Ref.01_14 Acker Inc.bought 40% of Howell Co.on January 1,2008 for $576,000.The

question 118

Multiple Choice

REFERENCE: Ref.01_14
Acker Inc.bought 40% of Howell Co.on January 1,2008 for $576,000.The equity method of accounting was used.The book value and fair value of the net assets of Howell on that date were $1,440,000.Acker began supplying inventory to Howell as follows:
Howell reported net income of $100,000 in 2008 and $120,000 in 2009 while paying $40,000 in dividends each year.
-What is the amount of unrealized intercompany inventory profit to be deferred on December 31,2008?

• A)$1,600.
• B)$4,000.
• C)$8,000.
• D)$15,000.
• E)$20,000.

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Definitions:

Social Selves

The concept referring to the parts of an individual's identity and personality that are derived from their social interactions and relationships.

Culturally Approved Standards

Norms and guidelines that are widely accepted and endorsed within a specific culture, guiding behavior and expectations.

"Me"

A concept in sociology that refers to the part of an individual's self that is formed through social interaction and understands societal expectations.

Immediate Gratification

The desire to experience pleasure or fulfillment without delay or deferment, often prioritizing short-term rewards over long-term benefits.