Consolidated Return Scenario: Company P Purchased an 80% Interest in Company

question 36

Multiple Choice

Consolidated Return Scenario: Company P purchased an 80% interest in Company S on January 1, 20X3, for $800,000. On the purchase date, Company S stockholders' equity was $800,000. Any excess of cost over book value was attributed to a patent with a 10-year remaining life. In 20X3, Company P reported internally generated net income before taxes of $150,000. Company S reported a net income before taxes of $70,000. The firms file a consolidated tax return at a 30% tax rate.
-Refer to the Separate Return scenario. The controlling share of consolidated net income is ____.

• A) $81,200
• B) $70,805
• C) $78,480
• D) $74,256

---

Definitions:

Branded Social Interactions

Online engagements between consumers and brands on social media platforms that are influenced by the brand's messaging or presence.

Social Interactions

Exchanges between individuals or groups, often facilitated by digital platforms, that involve communication, collaboration, or other forms of social engagement.

Social Snackers

Individuals who consume small amounts of content from various social media platforms throughout the day, without engaging deeply with any particular piece.