Yukon Co Acquired 75% Percent of the Voting Common Stock of of Ontario

question 117

Multiple Choice

Yukon Co. acquired 75% percent of the voting common stock of Ontario Corp. on January 1, 2011. During the year, Yukon made sales of inventory to Ontario. The inventory cost Yukon $260,000 and was sold to Ontario for $390,000. Ontario still had $60,000 of the goods in its inventory at the end of the year. The amount of unrealized intra-entity profit that should be eliminated in the consolidation process at the end of 2011 is

• A) $15,000.
• B) $20,000.
• C) $32,500.
• D) $30,000.
• E) $110,000.

Understand the basic concepts of asset depreciation and the factors affecting it.

Calculate depreciation using the straight-line method and identify its implications on financial statements.

Apply the double-declining-balance method for calculating asset depreciation and understand its impact on asset valuation.

Determine depreciation expense using the units-of-output method and its relevance to asset utilization.

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Definitions:

Applied

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Engineering Notation

A version of scientific notation in which powers of ten are used, and the exponent is a multiple of three.

Prefix

A syllable or group of syllables added at the beginning of a word to alter its meaning or create a new word, often used in units of measurement.

Stamp Act Congress

A meeting of delegates from several American colonies in 1765, formed to protest the British Stamp Act and organize resistance.