In X1, Plus Company purchases 75% of the outstanding shares of Minus Company. The following intercompany...

Transcribed Image Text:

In X1, Plus Company purchases 75% of the outstanding shares of Minus Company. The following intercompany inventory sales occurred: • In X3, Plus sold merchandise to Minus with a profit of $10,000. 40% of the transferred units remained in Minus' inventory at the end of X3. • In X4, Plus sold merchandise to Minus with a profit of $5,000. 30% of the transferred units remained in Minus' inventory at the end of X4. Assume the inventory is sold within a year. What would be the net impact of these two transactions on the consolidated Inventory of Plus for the year X4? In X1, Plus Company purchases 75% of the outstanding shares of Minus Company. The following intercompany inventory sales occurred: • In X3, Plus sold merchandise to Minus with a profit of $10,000. 40% of the transferred units remained in Minus' inventory at the end of X3. • In X4, Plus sold merchandise to Minus with a profit of $5,000. 30% of the transferred units remained in Minus' inventory at the end of X4. Assume the inventory is sold within a year. What would be the net impact of these two transactions on the consolidated Inventory of Plus for the year X4?

Answer rating: 100% (QA)

Solution The net impact of the two transactions on the consolidated Inventory of Plus for the year X... View the full answer