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Discuss why the gross profit on intercompany sales

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Reference no: EM131921467

Questions -

1. Discuss whether or not the elimination of the effects of intercompany sales of merchandise always affects the amount of reported consolidated net income. Explain in detail.

2. Discuss why the gross profit on intercompany sales, rather than profit after deduction selling and administrative expenses, is ordinarly eliminated from consolidated inventory balance.

Reference no: EM131921467

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