Gargiulo Company, a 90% Owned Subsidiary of Posito Corporation, Sells

question 83

Multiple Choice

Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2010.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2011 consolidation worksheet entry with regard to the unrealized gross profit of the 2010 intra-entity transfer of merchandise?

• A) $240.
• B) $300.
• C) $2,000.
• D) $1,600.
• E) $270.

Identify methods to improve self-understanding and overcome self-evaluation traps.

Learn about the historical impact of the Hawthorne studies on human relations and employee motivation.

Understand the role of the organizational environment and management practices in promoting employee productivity.

Recognize the impact of social media and the internet on organizational human relations.

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Definitions:

CCC

Refers to the Cash Conversion Cycle, a metric that gauges how efficiently a company manages its inventory, receivables, and payables to generate cash.

Peak Borrowing Needs

The maximum amount of capital a business or individual will need to borrow to meet its financial obligations.

Monthly Cash Budget

A financial plan projecting cash inflows and outflows on a monthly basis, used by companies to ensure liquidity and financial stability.

Costly Trade Credit

Credit taken in excess of free trade credit whose cost is equal to the discount lost.