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What is the after-tax dollar amount of s realized profits

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P Inc. owns 80% of S Inc. During 2018, P Inc. sold inventory to S for $10,000. Half of this inventory remained in S's warehouse at year end. S Inc. sold Inventory to P Inc. for $5,000. 40% of this inventory remained in P's warehouse at year end. Both companies are subject to a tax rate of 40%. The gross profit percentage on sales is 20% for both companies. (Show all calculation)

Problem a) What is the after-tax dollar value of P's unrealized profits during the year on its sales to S?

Problem b) What is the after-tax dollar amount of S's realized profits during the year on its sales to P ?

Reference no: EM132623354

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