Jay Inc. owns 80% of Tesla Inc. and uses the cost method to account for its investment. The 2013 income statements of both companies are shown below. On January 1, 2013, Tesla sold equipment to Jay at a profit of $3,000. The equipment had a remaining useful life of twenty years on that date. Both companies are subject to an effective tax rate of 40%. The amount of gross profit appearing on Jay's 2013 Consolidated Income Statement would be:

Question

Jay Inc. owns 80% of Tesla Inc. and uses the cost method to account for its investment. The 2013 income statements of both companies are shown below.  On January 1, 2013, Tesla sold equipment to Jay at a profit of $3,000. The equipment had a remaining useful life of twenty years on that date. Both companies are subject to an effective tax rate of 40%. The amount of gross profit appearing on Jay's 2013 Consolidated Income Statement would be:

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The Answer of Jay Inc. owns 80% of Tesla Inc. and uses the cost method to account for its investment. The 2013 income statements of both companies are shown below.  On January 1, 2013, Tesla sold equipment to Jay at a profit of $3,000. The equipment had a remaining useful life of twenty years on that date. Both companies are subject to an effective tax rate of 40%. The amount of gross profit appearing on Jay's 2013 Consolidated Income Statement would be:

Jay Inc Owns 80% of Tesla Inc