Explore BrainMass

Inventory profits

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

How do unrealized intercompany inventory profits from a prior period affect the computation of consolidated net income when the inventory is resold in the current period? Is it important to know if the sale was upstream or downstream? Why or why not? Explain.

© BrainMass Inc. brainmass.com October 25, 2018, 8:41 am ad1c9bdddf

Solution Preview

Unrealized inter-company inventory profits are deferred until the inventory is sold to outside of the consolidated group. This is usually in the period following the deferred gross profit entry and so unrealized profits from a prior period usually result in the ...

Solution Summary

Your tutorial is 156 words and briefly explains.

See Also This Related BrainMass Solution

Inventory: Planter's 2010 Annual Report

See attached sheet. Help with problem 5-4a please.

Before releasing the 2010 annual report, Planter's controller learns that the inventory of one of the stores (amounting to $500,000) was counted twice in the December 31, 2009, inventory. The inventory was correctly counted in the December 31, 2010, inventory.

Please see attachment for full question.

View Full Posting Details