P Corporation Acquired a 60% Interest in S Corporation on January

question 32

Multiple Choice

P Corporation acquired a 60% interest in S Corporation on January 1, 2017, at book value equal to fair value. During 2017, P sold merchandise that cost $135,000 to S for $189,000. One-third of this merchandise remained in S's inventory at December 31, 2017. S reported net income of $120,000 for 2017. P's income from S for 2017 is:

• A) $36,000.
• B) $50,400.
• C) $54,000.
• D) $61,200.

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Definitions:

Weight Thermostats

The concept suggesting that the body regulates its weight around a biologically predetermined point, akin to a thermostat regulates temperature.

Basal Metabolic Rate

The rate at which the body uses energy while at rest to maintain vital functions such as breathing and circulation.

Hunger

The physical sensation and psychological drive for food intake, resulting from the body's energy needs.

Settling Point

A theory related to body weight regulation, proposing that weight stabilizes around a natural "set point" determined by genetics and environment.