Anderson Company, a 90% Owned Subsidiary of Philbin Corporation, Transfers

question 97

Multiple Choice

Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020. Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends.
Compute the equity in earnings of Anderson reported on Philbin's books for 2022.

• A)$84,600.
• B)$84,375.
• C)$83,925.
• D)$84,825.
• E)$84,850.

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Definitions:

"Easy" Babies

infants who are generally calm, adapt quickly to new situations, have predictable patterns, and are not easily upset.

Labor-Intensive

Describing a process or type of work that requires a large amount of manual labor compared to the amount of capital invested or technology used.

High-Maintenance

Describing something or someone requiring a lot of time, attention, or resources to manage or maintain.

Moderately Labor-Intensive

Describing activities or processes that require a fair amount of human labor to complete.