Push Company Owns 60% of Shove Company's Outstanding Common Stock

question 37

Multiple Choice

Push Company owns 60% of Shove Company's outstanding common stock.
Intra-entity sales are as follows:

-Assume Push sold the inventory to Shove.
Using the fully adjusted equity method,what journal entry would be recorded by Push to recognize the realization of the 20X1 deferred intercompany profit and to defer the 20X2 unrealized gross profit on inventory sales to Shove?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Disaffirm

The legal act of declaring a contract or agreement void and refusing to honor it, usually due to issues like minor status or fraud.

Semi-invalid

Describes a state or condition where something or someone is partially, but not completely, invalid or unacceptable.

Sued

A legal process where one party files a lawsuit against another in a court of law.

Public Funds

Financial resources collected by the government, typically through taxation, to be used for public purposes and services.