Acker Inc Bought 40% of Howell Co

question 123

Multiple Choice

Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: Howell reported net income of $100,000 in 2020 and $120,000 in 2021 while paying $40,000 in dividends each year.What is the Equity in Howell Income that should be reported by Acker in 2021?

• A)$32,000.
• B)$41,600.
• C)$48,000.
• D)$49,600.
• E)$50,600.

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Definitions:

Arousal

A physiological and psychological state of being awake or reactive to stimuli.

Coercive Paraphilias

Paraphilic disorders characterized by intense sexual fantasies, urges, or behaviors that involve the psychological or physical suffering of another person.

Noncoercive Paraphilias

Sexual interests outside the norm that do not involve harm or coercion to others.

Sexual Fantasies

Imagined sexual scenarios that an individual finds arousing or pleasurable.