Lauralee, inc. owns a 30% interest in eastwood co., giving it representation on the investee’s board of directors. at the beginning of the year, the equity investment was carried on lauralee’s balance sheet at $500,000. during the year, eastwood reported net income of $250,000 and paid lauralee a dividend of $50,000. in addition, lauralee sold inventory to eastwood, recording a gross profit of $20,000 on the sale. at the end of the year, 50% of the merchandise remained unsold by eastwood.

required:
a. prepare the equity method journal entry to defer the unrealized inventory gross profit.
b. how much equity income should lauralee report from eastwood during the year?
c. what is the balance in the equity investment at the end of the year?

Eliminating entries (including goodwill impairment) and worksheets for various years on january 1, 2013, porter company purchased an 80% interest in the capital stock of salem company for$850,000. at that time, salem company had capital stock of $550,000 and retained earnings of $80,000.differences between the fair value and the book value of the identifiable assets of salem company were asfollows: fair value in excess of book valueequipment$130,000land65,000inventory40,000the book values of all other assets and liabilities of salem company were equal to their fair values onjanuary 1, 2013. the equipment had a remaining life of five years on january 1, 2013. the inventory was sold in2013.salem company’s net income and dividends declared in 2013 and 2014 were as follows: year 2013 net income of $100,000; dividends declared of $25,000year 2014 net income of $110,000; dividends declared of $35,000required: a.prepare a computation and allocation schedule for the difference between book value of equity acquired andthe value implied by the purchase price.b.present the eliminating/adjusting entries needed on the consolidated worksheet for the year endeddecember 31, 2013. (it is not necessary to prepare the worksheet.)lo6lo1

mark, a civil engineer, entered into a contract with david. as per the contract, mark agreed to design and build a house for david for a specified fee. mark provided david with an estimation of the total cost and the contract was mutually agreed upon. however, during construction, when mark increased the price due to a miscalculation on his part, david refused to pay the amount. this scenario is an example of a mistake.

Oliver's company is planning the launch of their hybrid cars. the company has included "never-before-seen" product benefits in the hybrid cars. which type of advertising should oliver's company use for the new cars?