Gardner Corp

question 49

Multiple Choice

Gardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: Separate company net income includes intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary.What amount should be reported for consolidated net income?

• A) $1,425,000.
• B) $1,490,000.
• C) $1,525,000.
• D) $1,635,000.
• E) $1,700,000.

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Definitions:

Connectives

Logical operators that are used to connect propositions in compound statements, such as and, or, if...then.

Main Connective

The primary logical operator in a logical formula that determines the overall truth or falsity of the formula.

Atomic Statements

Simple, indivisible statements that express a single fact.

Main Components

Essential parts or elements of a system, mechanism, or compound that are critical to its function or structure.