1. In 20X6, Vines Inc. (Vines) purchased 40% of the common shares of Bottles Inc. (Bottles). At that time, there were no fair value differentials. In 20X7, Vines sold inventory to Bottles for $80,000. $25,000 of this remained at the end of the year. Bottles sold this inventory in 20X8. Also during 20X8, Vines sold additional inventory to Bottles for $60,000, of which $30,000 remains in inventory. Vines earns a 30% gross profit on the sales of its inventory. Both companies pay income tax at 25%. During 20X8, Bottles had net income of $200,000. 
2. What is the amount of earnings per share reported by Vines in 20X8?

Answer rating: 100% (QA)

To calculate the earnings per share reported by Vines in 20X8 we need to determine Vines net income for that year First lets calculate the cost of goo... View the full answer