"Tiberend, Inc., sold $150,000 in inventory to Schilling Company during 2017 for $225,000. Schilling resold $105,000 of this mer
2 answers:
Answer:
$9900
Explanation:
Given:
- Inventory value $150,000
- Revenue: $225,000
- Schilling resold: $105,000
- Tiberend owns 25 percent
We need to find the gross profit and its ratio.
The gross profit = Revenue - Inventory value
= $225,000 - $150,000 = $75,000
The gross profit ratio = =
=
= 33.33%
Ending inventory with schilling resold
= Revenue - schilling resold
= $225,000 - $105,000 = $120,000
Total unrealized profit: $120,000*25% = $30,000
So, Intra entity unrealized gross profit is
= Total unrealized profit × Tiberend ownership intra entity unrealized gross profit is
= $30,000 × 33%
= $9900
Hope it will find you well.
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Answer:
b. Cannot tell the change in equilibrium quantity. The equilibrium price will decrease
Explanation:
Two things are going on here
1. Income decreases, that will shift demand inwards. People can buy fewer goods at any given price
2. New technology is discovered, that shifts supply outwards. Costs are reduced so producers can produce more at a given price
The resulting effects are that price will decrease but the result in quantity is undetermined. This can be seen with the two examples attached. In both cases, the shifting of the curves from D0->D1 and S0->S1 results in lower prices. However, in one case the equilibrium quantity goes up and in the other goes up.
