Answer:
TRUE
Explanation:
It is true that when an intercompany inventory profit resulting from a sale by a less than 100% owned subsidiary to its parent is eliminated, the full amount (100%) of the decrease in profit is deducted from consolidated net income available to the parent shareholders.
Unrealized profits are the profit element not earned because they were not sold to third parties, it was basically a transfer between one company in a group (for example subsidiary) and another company in the same group (for example to the parent company).
At the year-end, if the goods are still in inventory, any profit thereon cannot be recognized but eliminated. Therefore for consolidation purposes, this unrealized profit element is taken out of inventory value in order to reduce the inventory value back down to the lower of cost or net realizable value.
This is done by crediting the inventory amount and debiting consolidated retained earnings.
Yeah blue dinosaur is perfect
Answer:
a.$5,667
Explanation:
According to the weighted average cost method, all units on inventory must be priced equally. If the company had 1,000 units at $1.00 and purchased an additional 5,000 units for $5,800, the total cost per unit is:
If 5,000 units were sold, the cost of goods sold is:
Palmer Company's cost of goods sold was $5,667.
Answer:
The correct answer is $1,000.
Explanation:
According to the scenario, the computation of the given data are as follows:
Receives a loan = $100,000
Withdraws = $50,000
Interest rate = 2%
So, we can calculate the implicit cost by using following formula:
Implicit cost = Withdrawal amount × Tax rate
By putting the value, we get
Implicit cost = $50,000 × 2%
= $1,000
Answer:
$307 million
Explanation:
Iron ore Corporation reported a free cash flow of $106 million
The investment in operating capital is $189 million
Iron ore listed a depreciation expense of $39 million and a tax of $51 million on its income statement for 2008.
The first step is to calculate the operating cash flow
Free cash flow= Operating cash flow-Investment in operating capital
$106m= OCF-$189m
OCF= $106m+$189m
OCF= $295m
Operating cash flow= $295 million
Therefore, the EBIT can be calculated as follows
Operating cash flow= EBIT-Taxes+Depreciation
$295m= EBIT-$51m+$39m
$295m= EBIT-$12m
EBIT= $295m+$12m
EBIT= $307 million
Hence the iron ore's 2008 EBIT is $307 million.
