Walsh Company Sells Inventory to Its Subsidiary, Fisher Company, at a Profit

question 92

Multiple Choice

Walsh Company sells inventory to its subsidiary, Fisher Company, at a profit during 2010. One-third of the inventory is sold by Walsh uses the equity method to account for its investment in Fisher.
-In the consolidation worksheet for 2011, which of the following choices would be a credit entry to eliminate unrealized intra-entity gross profit with regard to the 2010 intra-entity sales?

• A) Retained earnings.
• B) Cost of goods sold.
• C) Inventory.
• D) Investment in Fisher Company.
• E) Sales.

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Definitions:

Filtration Membrane

A biological or synthetic membrane that acts as a barrier to separate particles in a fluid, used in both biological systems and industrial processes.

Net Filtration Pressure

The difference between the forces pushing fluid out of the capillary and the forces pulling fluid into the capillary, crucial in determining fluid movement across capillary walls.

Capsular Hydrostatic Pressure

Capsular hydrostatic pressure refers to the pressure within the Bowman's capsule in the kidneys, influencing the process of glomerular filtration.

Proximal Convoluted Tubule

The portion of the nephron in the kidney which is involved in the reabsorption of water, ions, and all organic nutrients.