Answer:
$9900
Explanation:
Given:
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 = [tex]\frac{Gross profit}{Revenue}[/tex] = [tex]\frac{75,000}{225,000}[/tex] = [tex]\frac{1}{3}[/tex] = 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.
Answer:
Gross profit = = 33.33%
Unrealized gross profit = $10,000
Explanation:
Given data:
Selling price of inventory = 225,000
Cost price of inventory = 150, 000
Inventory sold to other company = $105,000
To prepare the journal entry, the following is calculated
(a) Gross profit percentage:
Gross profit percentage is calculated using the formula
Gross profit = (selling price of inventory - cost price of inventory)/selling price of inventory * 100
Gross profit = {(225,000 - 150,000)/225,000] * 100
= (75,000/225,000) * 100
= 0.3333 * 100
= 33.33%
(b) Unrealized gross profit:
The unrealized gross profit is calculated using the formula;
Unrealized gross profit =
(Inventory sold to S -Inventory sold to others) * gross profit * shares own
Substituting, we have
Unrealized gross profit = (225,000 - 105,000) * 33.33% * 25%
=120,000 * 33.33% * 25%
= 120,000 * 0.3333 * 0.25
= $10,000 (approximately)
The journal entry is given as;
Date Description Debit Credit
2017 Income from investment $10,000
Investment in S company $10,000
(To record the unrealized gross profit)
