Phelps Co. uses the sophisticated equity method to account for the 80% investment in its...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values. During the year, Shore sells inventory to Phelps. Based upon the following information, what is consolidated net income?
Phelps internally generated income:
$250,000
Shore internally generated income:
$ 50,000
Intercompany profit in beginning inventory purchased from Shore:
$ 10,000
Intercompany profit in ending inventory purchased from Shore:
$ 15,000
a.
$300,000
b.
$295,000
c.
$286,000
d.
$305,000
Show your work please
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
