Anderson Company, a 90% Owned Subsidiary of Philbin Corporation, Transfers

question 90

Multiple Choice

Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020. Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends. Compute the equity in earnings of Anderson reported on Philbin's books for 2022.

• A) $84,600.
• B) $84,375.
• C) $83,925.
• D) $84,825.
• E) $84,850.

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Definitions:

Double Jeopardy

A legal principle that prevents an individual from being tried twice for the same offense.

Same Crime

The principle that individuals committing the same offense should receive equal treatment and punishment under law.

Tried Twice

Being subjected to prosecution for the same offense in the same jurisdiction more than once, prohibited under the "double jeopardy" clause of the Fifth Amendment to the U.S. Constitution.

Civil Rights Act

A landmark piece of legislation in the United States that outlaws discrimination based on race, color, religion, sex, or national origin.