How do unrealized intercompany inventory profits from period

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1) How do unrealized intercompany inventory profits from a prior period affect the computation of consolidated net income when the inventory is resold in the current period? Is it important to know if the sale was upstream or downstream? Why or why not?

2) If, under GAAP, capital leases are considered long-term obligations, why, in many jurisdictions, are they not subject to debt limitations?

Respond with thoughtful additions or corrections to at least two classmates' postings.

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