Bing Company Owns 30% Interest in the Stock of Yeti

question 9

Multiple Choice

Bing Company owns 30% interest in the stock of Yeti Corporation. During the year, Yeti pays $75,000 in dividends to Bing, and reports $400,000 in net income. Bing Company's investment in Yeti will increase Bing net income by

• A) $120,000.
• B) $97,500.
• C) $75,000.
• D) $22,500.

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Definitions:

Franchisor's Property

Assets, trademarks, or intellectual property owned by the franchisor that are licensed to franchisees under a franchise agreement.

Franchise Territory

a specified geographic area granted to a franchisee in which they have the rights to operate and market the franchisor's business.

Franchise Contract

A legal agreement granting someone the right to operate a business using the franchisor's brand, system, and support for a specified period.

Territory Determination

The process of defining geographic boundaries or areas for legal, administrative, or other purposes.