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Business, 11.02.2020 01:21 smithnakayla19

Perez, Inc., applies the equity method for its 25 percent investment in Senior, Inc. During 2018, Perez sold goods with a 40 percent gross profit to Senior, which sold all of these goods in 2018. How should Perez report the effect of the intra-entity sale on its 2018 income statement?a. Sales and cost of goods sold should be reduced by the amount of intra-entity sales. b. Sales and cost of goods sold should be reduced by 25 percent of the amount of intra-entity sales. c. Investment income should be reduced by 25 percent of the gross profit on the amount of d. No adjustment is necessary. intra-entity sales.

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Perez, Inc., applies the equity method for its 25 percent investment in Senior, Inc. During 2018, Pe...
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