The Following Information Pertains to Questions

question 68

Multiple Choice

The following information pertains to questions
Find Corp.is a joint venture in which Seek Inc.has a 20% interest.Seek uses the equity method to account for its investment but has yet to make any journal entries for 2010.The financial statements of both companies are shown below on December 31,2010. During 2010,Seek sold merchandise totaling $120,000 to Find and recorded a gross profit of 50% on these sales.At the end of 2010,Find's inventory contained $30,000 worth of merchandise purchased from Seek.Find also owed $50,000 to find at the end of 2010.
Seek shall use the proportionate consolidation method (current Canadian GAAP) to report its investment in Find Corp.for 2010.Both companies are subject to 40% tax rate.
-What is the total amount of intercompany receivables to be eliminated from the financial statements?

• A)$50,000
• B)$10,000
• C)$40,000
• D)Nil

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Definitions:

Vroom-Jago

A decision-making model that focuses on how leaders can choose the most effective decision-making style based on the nature of the decision situation.

Leader-Participation Model

A leadership theory that suggests the ideal leadership style depends on various situational factors, including the nature of the task and the relationship between the leader and the followers.

Authority Decision

A decision-making process where decisions are made by individuals in positions of authority, often without consulting those who will be affected by the decisions.

Vroom-Jago

A leadership model that emphasizes decision-making processes and involves evaluating the situation to choose the best leadership style.