Petrel Corporation acquired a 60% interest in Salt Corporation on January 1, 2005, at a cost equal to book value and fair value. Salt reports net income of $880,000 for 2005. Petrel regularly sells merchandise to Salt at 120% of Petrel?s cost. The intercompany sales information for 2004 is as follows;Intercompany sales at selling price $ 672,000;Value of merchandise remaining;unsold by Salt 132,000;Required;1.;Determine the unrealized profit in Salt?s inventory at December 31, 2004.;2.;Compute Petrel?s income from Salt for 2005.
Paper#26887 | Written in 18-Jul-2015Price : $27