The Following Information Pertains to Questions

question 26

Multiple Choice

The following information pertains to questions
X Inc.owns 80% of Y Inc.During 2009,X Inc sold inventory to Y for $10,000.Half of this inventory remained in Y's warehouse at year end.Half of this inventory remained in Y's warehouse at year end.Also during 2009,Y Inc sold Inventory to X Inc.for $5,000.40% of this inventory remained in X's warehouse at year end.Both companies are subject to a tax rate of 50%.The gross profit percentage on sales is 20% for both companies.Unless otherwise stated,assume X Inc.uses the cost method to account for its Investment in Y.Inc.
-What is the after-tax dollar value of X's realized profits during the year on its sales to Y?

• A)$2,000.
• B)$400.
• C)$200.
• D)$500.

---

Definitions:

Subject Line

Clarification: A concise title that encapsulates the essence of an email's message, designed to grab the recipient's attention.

Message Tone

The attitude or emotional character of a written or spoken communication, influencing how the recipient perceives its content.

Polite Message

A form of communication that is respectful and considerate, often used to convey requests or information in a courteous manner.

Persisting Objections

Persistent objections are repeated or continuous expressions of dissent or disapproval that resist resolution or persuasion.