REFERENCE: Ref.01_17 Steven Company Owns 40% of the Outstanding Voting Common Stock

question 47

Essay

REFERENCE: Ref.01_17
Steven Company owns 40% of the outstanding voting common stock of Nicole Corp.and has the ability to significantly influence the investee's operations.On January 3,2009,the balance in the Investment in Nicole Corp.account was $503,000.Amortization associated with this acquisition is $12,000 per year.During 2009,Nicole earned net income of $120,000 and paid cash dividends of $40,000.Previously in 2008,Nicole had sold inventory costing $35,000 to Steven for $50,000.All but 25% of that inventory had been sold to outsiders by Steven during 2008.Additional sales were made to Steven in 2009 at a transfer price of $75,000 that had cost Nicole $54,000.Only 10% of the 2009 purchases had not been sold to outsiders by the end of 2009.
-What amount of unrealized intercompany profit should be deferred by Steven at December 31,2009?

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Definitions:

Counterculture

A culture, especially among the young, that rejects the dominant societal norms and values, often manifesting in alternative lifestyles and political viewpoints.

Social Control

A mechanism, typically involving laws, norms, and norms enforcement, used by society to regulate individual and group behavior, maintaining social order.

Replication of Privilege

The process through which advantages and privileges are passed down from one generation to the next, perpetuating social inequality.

Cow Worship

Cow Worship refers to the veneration of cows, often viewed as a sacred practice in various cultures and religions, notably Hinduism, where cows are revered as symbols of life and earth.