Figure:
Acker Inc Howell Reported Net Income of $100,000 in 2010 and $120,000

question 78

Multiple Choice

Figure:
Acker Inc. bought 40% of Howell Co. on January 1, 2010 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: $\begin{array}{cccc}\text { Year } & \begin{array}{c}\text { Cost to } \\\text { Acker }\end{array} & \begin{array}{c}\text { Transfer } \\\text { Price }\end{array} & \begin{array}{c}\text { Amount Held by } \\\text { Howell at Year-End }\end{array} \\2010 & \$ 55,000 & \$ 75,000 & \$ 15,000 \\2011 & \$ 70,000 & \$ 110,000 & \$ 55,000\end{array}$ Howell reported net income of $100,000 in 2010 and $120,000 in 2011 while paying $40,000 in dividends each year.
-What is the amount of unrealized intra-entity inventory profit to be deferred on December 31, 2010?

• A) $1,600.
• B) $4,000.
• C) $8,000.
• D) $15,000.
• E) $20,000.

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An Italian philosopher known for his work in the field of political philosophy, particularly regarding concepts of sovereignty, the state of exception, and bare life.

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