Search Company Is a 90% Owned Subsidiary of Passage Company

question 17

Multiple Choice

Search Company is a 90% owned subsidiary of Passage Company. On January 1, 2016, Search Company purchased for $680,000 bonds of Passage Company that had a carrying value of $725,000 (par value $700,000) . The bonds mature on December 31, 2017. Both companies use the straight-line method of amortization and have a December 31 year-end. The increase in 2016 consolidated income (i.e., income before subtracting noncontrolling interest) is:

• A) $45,000.
• B) $44,000.
• C) $54,000.
• D) $36,000.

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Definitions:

Color Variation

Differences in color within the same object or among objects, often occurring naturally.

Border Regularity

A term often used in the evaluation of skin lesions, describing the smoothness or irregularity of the lesion's edges.

Subcutaneous Fat

The layer of fat located just below the skin, serving as insulation and energy storage for the body.

Sebaceous Glands

Oil-producing glands located in the skin, responsible for secreting sebum to lubricate and waterproof the skin and hair.