Find Corp and Has Elected to Use Proportionate Consolidation Method

question 26

Multiple Choice

Find Corp and has elected to use proportionate consolidation method to report its investment in Find Corp. for 2013. Both companies are subject to 40% tax rate. What is the total amount of other expenses that would appear on the Consolidated Income Statement?

• A) $200,000
• B) $212,000
• C) $248,000
• D) $260,000

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Definitions:

Financial Break-even

The point at which a company's total revenues are exactly equal to its total expenses, resulting in neither profit nor loss.

Variable Costs

Charges that adjust in line with changes in production volume or output quantity.

Required Return

A rephrasing of Required Rate of Return; it's the expected return that investors demand for an investment in a particular asset, based on its risk.

Cash Break-even

The point at which a business generates enough cash flow to cover its operating expenses and capital costs.