On September 30, 20X8, Wilfred Company sold inventory to Jackson Corporation, its Canadian subsidiary. The goods cost Wilfred $30,000 and were sold to Jackson for $40,000, payable in Canadian dollars. The goods are still on hand at the end of the year on December 31. The Canadian dollar (C$) is the functional currency of the Canadian subsidiary. The exchange rates follow: Based on the preceding information, what amount of unrealized intercompany gross profit is eliminated in preparing the consolidated financial statements for the year?
A) $0
B) $5,000
C) $10,000
D) $15,000

Question

On September 30, 20X8, Wilfred Company sold inventory to Jackson Corporation, its Canadian subsidiary. The goods cost Wilfred $30,000 and were sold to Jackson for $40,000, payable in Canadian dollars. The goods are still on hand at the end of the year on December 31. The Canadian dollar (C$) is the functional currency of the Canadian subsidiary. The exchange rates follow:  Based on the preceding information, what amount of unrealized intercompany gross profit is eliminated in preparing the consolidated financial statements for the year?
A) $0 
B) $5,000 
C) $10,000 
D) $15,000

Quizplus · Accepted Answer

The Answer of On September 30, 20X8, Wilfred Company sold inventory to Jackson Corporation, its Canadian subsidiary. The goods cost Wilfred $30,000 and were sold to Jackson for $40,000, payable in Canadian dollars. The goods are still on hand at the end of the year on December 31. The Canadian dollar (C$) is the functional currency of the Canadian subsidiary. The exchange rates follow:  Based on the preceding information, what amount of unrealized intercompany gross profit is eliminated in preparing the consolidated financial statements for the year?
A) $0 
B) $5,000 
C) $10,000 
D) $15,000

On September 30, 20X8, Wilfred Company Sold Inventory to Jackson