For Consolidation Purposes, What Amount Would Be Debited to January

question 123

Multiple Choice

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2010 consolidation worksheet entry with regard to the unrealized gross profit of the 2010 intra-entity transfer of merchandise?

• A) $0.
• B) $1,600.
• C) $300.
• D) $240.
• E) $270.

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Definitions:

Required Production

The quantity of products that a company must manufacture in a specific period to meet customer demand and inventory policies.

Budgeted Production

The planned quantity of products a company intends to produce in a certain period, based on demand forecasts and capacity planning.

Raw Materials Inventory

The total cost of all components or materials a company has in stock that are intended for use in production to create finished goods.

Quarter's Production Needs

The estimated quantity of products that a company plans to produce in a specific quarter to meet customer demand.