At the end of the year watkins still holds only 20000 of, Ask an Expert

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Panner, Inc. owns 30 % of Watkins and applies the equity method. During the current year, Panner buys inventory costing $54,000 and then sells it to Watkins for $90,000. At the end of the year, Watkins still holds only $20,000 of mechandise. What ammount of unrealized gross profit must Panner defer in reporting this investment using the equity method?

a. $2,400

b. $4,800

c. $8,000

d. $10,800

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9414827

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