X Inc. owns 80% of Y Inc. During 2020, X Inc. sold inventory to Y...
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X Inc. owns of Y Inc. During X Inc. sold inventory to Y for $ Half of this inventory remained in Ys warehouse at year end. Y Inc. sold inventory to X Inc. for $ of this inventory remained in Xs warehouse at year end. Both companies are subject to a tax rate of The gross profit percentage on sales is for both companies. Unless otherwise stated, assume X Inc. uses the cost method to account for its investment in Y Inc. Assuming that X Inc. used the equity method instead of the cost method, what adjustment would have to be made to the investment in Y account to adjust for any unrealized profits on Ys sales to X Group of answer choices The account would have to be reduced by $ No adjustment would be required. The account would have to be reduced by $ The account would have to be reduced by $
X Inc. owns of Y Inc. During X Inc. sold inventory to Y for $ Half of this inventory remained in Ys warehouse at year end.
Y Inc. sold inventory to X Inc. for $ of this inventory remained in Xs warehouse at year end.
Both companies are subject to a tax rate of The gross profit percentage on sales is for both companies. Unless otherwise stated, assume X Inc. uses the cost method to account for its investment in Y Inc.
Assuming that X Inc. used the equity method instead of the cost method, what adjustment would have to be made to the investment in Y account to adjust for any unrealized profits on Ys sales to X
Group of answer choices
The account would have to be reduced by $
No adjustment would be required.
The account would have to be reduced by $
The account would have to be reduced by $
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