Alcor and Vax Inc, both Canadian private companies, formed a joint venture on January 1, 2013 called Inventure Inc. Alcor and Vax each hold a 50% in the venture and share equally in any profits or losses arising from the venture. The following statements were prepared on December 31, 2013. Other Information: During 2013, Inventure purchased $10,000 from Alcor. Alcor recorded a gross profit of $2,000 on these sales. On December 31, 2013, Inventure's inventories contained half of the merchandise purchased from Alcor. Alcor uses the cost method to account for its Investment in Inventure and has elected to report its investment using proportionate consolidation. An income tax allocation rate of 20% applies. Compute the Consolidated Net Income for 2013. Do not prepare an Income Statement.

Question

Alcor and Vax Inc, both Canadian private companies, formed a joint venture on January 1, 2013 called Inventure Inc. Alcor and Vax each hold a 50% in the venture and share equally in any profits or losses arising from the venture. The following statements were prepared on December 31, 2013.  Other Information: During 2013, Inventure purchased $10,000 from Alcor. Alcor recorded a gross profit of $2,000 on these sales. On December 31, 2013, Inventure's inventories contained half of the merchandise purchased from Alcor. Alcor uses the cost method to account for its Investment in Inventure and has elected to report its investment using proportionate consolidation. An income tax allocation rate of 20% applies. Compute the Consolidated Net Income for 2013. Do not prepare an Income Statement.

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The Answer of Alcor and Vax Inc, both Canadian private companies, formed a joint venture on January 1, 2013 called Inventure Inc. Alcor and Vax each hold a 50% in the venture and share equally in any profits or losses arising from the venture. The following statements were prepared on December 31, 2013.  Other Information: During 2013, Inventure purchased $10,000 from Alcor. Alcor recorded a gross profit of $2,000 on these sales. On December 31, 2013, Inventure's inventories contained half of the merchandise purchased from Alcor. Alcor uses the cost method to account for its Investment in Inventure and has elected to report its investment using proportionate consolidation. An income tax allocation rate of 20% applies. Compute the Consolidated Net Income for 2013. Do not prepare an Income Statement.

Alcor and Vax Inc, Both Canadian Private Companies, Formed a Joint