Stark Company, a 90% Owned Subsidiary of Parker, Inc

question 83

Multiple Choice

Stark Company, a 90% owned subsidiary of Parker, Inc., sold land to Parker on May 1, 2020, for $80,000. The land originally cost Stark $85,000. Stark reported net income of $200,000, $180,000, and $220,000 for 2020, 2021, and 2022, respectively. Parker sold the land purchased from Stark for $92,000 in 2022. Both companies use the equity method of accounting.Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stark reported on Parker's books for 2020.

• A) $205,000.
• B) $200,000.
• C) $180,000.
• D) $175,500.
• E) $184,500.

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Definitions:

Female

Female is a term used to describe the sex of an individual that typically possesses two X chromosomes and is capable of bearing offspring or producing eggs.

Low-Income Individuals

People who earn significantly less than the average income for their community or country, often resulting in financial hardship.

Male

Referring to the sex that is typically associated with the production of small gametes for reproduction, often associated with specific physiological and genetic features.

Flashbacks

Intense, vivid memories that feel as though a person is reliving a traumatic event from the past.