The Following Information Pertains to Questions

question 17

Essay

The following information pertains to questions
P Inc.owns 70% of Q Inc.During 2006,P Inc sold inventory to Q for $20,000.Half of this inventory remained in Q's warehouse at December 31,2002 year end.On January 1,2002,Q Inc had inventory in its warehouse which was purchased from P for $5,000.This inventory was sold to an outside party during 2006.Also during 2006,Q Inc sold inventory to P Inc.for $10,000.50% of this inventory remained in P's warehouse at year end.Both companies are subject to a tax rate of 25%.The gross profit percentage on sales is 30% for both companies.P Inc.uses the cost method to account for its Investment in Q Inc.The inventories of both companies as at December 31,2006 was all sold to outsiders during 2007.There were no intercompany transactions during 2007.
-Prepare a schedule showing the realized and unrealized profits for Q Inc.for 2006 and 2007.Your schedule should include both pre-tax and after-tax amounts.

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Definitions:

Power Structure

The organization and distribution of power among various entities within a society, typically involving politics, corporations, and social groups.

United States And Mexico

Refers to the complex and multifaceted relationship between the United States of America and Mexico, encompassing diplomacy, trade, immigration, and historical conflicts.

First World War

A global conflict that occurred from 1914 to 1918, involving most of the world's nations and characterized by trench warfare and massive casualties, marking a significant shift in military and geopolitical power.

Second World War

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.