Question: What is the difference between downstream and upstream sales How
What is the difference between downstream and upstream sales? How does this difference impact application of the equity method?
Answer to relevant QuestionsHow is the unrealized gross profit on intra-entity sales calculated? What effect does an unrealized gross profit have on the recording of an investment if the equity method is applied? Goldman Company reports net income of $140,000 each year and pays an annual cash dividend of $50,000. The company holds net assets of $1,200,000 on January 1, 2010. On that date, Wallace purchases 40 percent of the ...Tiberand, Inc., sold $150,000 in inventory to Schilling Company during 2010 for $225,000. Schilling resold $105,000 of this merchandise in 2010 with the remainder to be disposed of during 2011. Assuming that Tiberand owns 25 ...Smith purchased 5 percent of Barker’s outstanding stock on October 1, 2009, for $7,475 and acquired an additional 10 percent of Barker for $14,900 on July 1, 2010. Both of these purchases were accounted for as ...On January 1, 2011, Acme Co. is considering purchasing a 40 percent ownership interest in PHC Co., a privately held enterprise, for $700,000. PHC predicts its profit will be $185,000 in 2011, projects a 10 percent annual ...
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