Parent Corporation Purchased Land from S1 Corporation for $220,000 on December

question 43

Multiple Choice

Parent Corporation purchased land from S1 Corporation for $220,000 on December 26, 20X8. This purchase followed a series of transactions between P-controlled subsidiaries. On February 15, 20X8, S3 Corporation purchased the land from a nonaffiliate for $160,000. It sold the land to S2 Company for $145,000 on October 19, 20X8, and S2 sold the land to S1 for $197,000 on November 27, 20X8. Parent has control of the following companies: Parent reported income from its separate operations of $200,000 for 20X8.
Based on the preceding information, what should be the amount of income assigned to the controlling shareholders in the consolidated income statement for 20X8?

• A) $369,400
• B) $405,000
• C) $465,000
• D) $60,000

Determine the financial effect of discontinuing operations or changes in sales territory on overall net operating income.

Understand the differences between absorption costing and variable costing, including their impact on operating income.

Develop the ability to construct and interpret segmented income statements in a contribution format.

Calculate and understand the significance of ending finished goods inventory valuation under different costing methods.

---

Definitions:

Role Play

An educational or therapeutic technique in which individuals act out roles in specific scenarios to learn about themselves, improve skills, or gain understanding of others.

Comprehensive Exam

An extensive examination that covers a wide range of material within a specific field of study, often a requirement for graduate-level programs.

Distorted View

An inaccurate or twisted perception of reality, often influenced by biases or misconceptions.