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  3. acker inc. bought 40% of howell co. on january 1,

Acker Inc. bought 40% of Howell Co. on January 1, 2022 for $576,000. The equity...

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Accounting

Acker Inc. bought 40% of Howell Co. on January 1, 2022 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:

Cost to

Transfer

Amount Held by

Year

Acker

Price

Howell at Year-End

2012

$55,000

$ 75,000

$15,000

2013

$70,000

$110,000

$55,000

Howell reported net income of $100,000 in 2022 and $120,000 in 2023 while paying $40,000 in dividends each year.

  1. What is the amount of unrealized intra-entity inventory profit to be deferred on December 31, 2022?

  1. What is the amount of unrealized intra-entity inventory profit to be deferred on December 31, 2023?

  1. What is the Equity in Howell Income that should be reported by Acker in 2022?

4. What is the balance in Ackers Investment in Howell account at December 31, 2022?

5. What is the Equity in Howell Income that should be reported by Acker in 2023?

6- What is the balance in Ackers Investment in Howell account at December 31, 2023?

note: for each part we need journal entries

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