The Following Information Pertains to Questions

question 45

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 profits in ending inventory?

• A)$30,000
• B)$20,000
• C)$15,000
• D)$2,000

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Definitions:

View Tab

A tab in software applications that contains options and settings for changing the appearance of the workspace or documents.

Home Tab

The primary tab in many software applications, providing access to common functions and tools.

Comparison Operator

is a symbol or set of symbols used in programming languages and mathematical expressions to compare two values or expressions.

Goal Seeking

A feature in spreadsheet programs that works by finding the input value needed to achieve a specific target value in a formula.