How do unrealized intercompany inventory profits from a prior period affect the computation of consolidated net income

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How do unrealized intercompany inventory profits from a prior period affect the computation of consolidated net income when the inventory is resold in the current period? Is it important to know whether the sale was upstream or downstream? Why, or why not?

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Advanced Financial Accounting

ISBN: 978-0078025624

10th edition

Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker

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