On January 1, 20X7, Servant Company Purchased a Machine with an Expected

question 47

Multiple Choice

On January 1, 20X7, Servant Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Servant sold the machine to Master Corporation and recorded the following entry: Master Corporation holds 75 percent of Servant's voting shares. Servant reported net income of $50,000, and Master reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
Based on the preceding information, consolidated net income for 20X9 will be:

• A) $150,000.
• B) $100,000.
• C) $148,000.
• D) $130,000.

Analyze the effects of interest rate changes on the present and future value of financial instruments.

Compare and decide among various investment opportunities using the present value concept.

Understand the role of capital inputs and the difference between stocks and flows in production.

Apply the concept of present value to real-life scenarios like contracts, investments, and lawsuits.

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Definitions:

Enforce

To enforce adherence to or fulfillment of a regulation, statute, or duty.

Irrevocable Will

is a will that cannot be revoked or altered once it has been finalized, ensuring that the wishes of the deceased are carried out as specified.

Trust Instrument

A legal document that sets up a trust agreement, specifying how the trust assets are to be managed and distributed.

Trustee

An individual or organization that holds or manages and invests property or assets for the benefit of a third party.