2.99 See Answer

Question: Jubilee, Inc., owns 35 percent of JPW


Jubilee, Inc., owns 35 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $60,000 and then sells it to JPW for $75,000. At the end of the year, JPW still holds only $30,000 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment using the equity method?
a. $2,100
b. $2,625
c. $6,000
d. $10,500

2.99

See Answer