512) Find Corp and has elected to use proportionate consolidation method to report its investment in Find Corp. for 2013. Both companies are subject to 40% tax rate. What is the total amount of intercompany pre-tax profits in ending inventory?

Question

Quizplus · Accepted Answer

Find Corp. has $15,000 of pre-tax profits in ending inventory. Find Corp. owns 50% of Corp. and has elected to use proportionate consolidation method to report its investment in Corp. for 2013. Therefore, the total amount of intercompany pre-tax profits in ending inventory is $15,000 * 50% = $3,000.

512) Find Corp and Has Elected to Use Proportionate Consolidation