Ask Question
18 April, 11:42

Jordan, Inc., holds 75 percent of the outstanding stock of Paxson Corporation. Paxson currently owes Jordan $400,000 for inventory acquired over the past few months. In preparing consolidated financial statements, what amount of this debt should be eliminated?

a) 0

b) $100,000.

c) $300,000.

d) $400,000.

+4
Answers (1)
  1. 18 April, 14:12
    0
    Because this is an inter-entity balance then the amount that should be eliminated of this debt is the letter D. all the $400,000.

    Explanation:

    Inter entity balance facilitates the management of allocations and transfers between entities. They provide a better control over transactions spanning multiple entities, other benefit is that the accuracy of the financial data improves and finally and this is why the anser is option D. is that it keeps each entity in balance
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Jordan, Inc., holds 75 percent of the outstanding stock of Paxson Corporation. Paxson currently owes Jordan $400,000 for inventory acquired ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers