P Company sold merchandise to a subsidiary for $64,000. Gross profit rate is 40%.
Question # 00695583
Posted By:
Updated on: 06/08/2018 01:34 AM Due on: 12/31/2019
Complete the following. Marks are allocated for before tax unrealized profit and after tax unrealized profit. Show calculations for possible part marks.
a) P Company sold merchandise to a subsidiary for $64,000. Gross profit rate is 40%. At year end, 20% of this remains unsold. The tax rate is 30%. What is the before tax and after-tax unrealized profit in ending inventory? Please highlight the after-tax unrealized profit in yellow. (2 marks)
Clearly indicate your answers as shown below:
- Calculations:
- Before tax unrealized profit:
- After tax unrealized profit:
b) P Company sold merchandise to a subsidiary for $63,000. The mark-up on cost in 50%. At year end. 20% of this remains unsold. The tax rate is 30%. What is the before tax and after tax unrealized profit in ending inventory? Please highlight the after-tax unrealized profit in yellow. (2 marks)
- Calculations:
- Before tax unrealized profit:
- After tax unrealized profit:
C) AB Company issued a 10 year, 5%, $2,000,000 bond paying interest twice a year at a market rate of 4.2%. What was the issue price? Please highlight the issue price in yellow. (2 marks)
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Rating:
5/
Solution: answer question 1