Acker Inc Bought 40% of Howell Co Howell Reported Net Income of $100,000 in 2012 and $120,000

question 66

Multiple Choice

Acker Inc. bought 40% of Howell Co. on January 1, 2012 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: $\begin{array}{llll}& \text { Cost to } & \text { Transfer } & \text { Amount Held by } \\\text { Year } & \text { Acker } & \text { Price } & \text { Howell at Year-End }\\\hline2012 & \mathbf{\$} 55,000 & \$ 75,000 & \$ 15,000 \\2013 & \$ 70,000 & \$ 110,000 & \$ 55,000\end{array}$ Howell reported net income of $100,000 in 2012 and $120,000 in 2013 while paying $40,000 in dividends each year. What is the Equity in Howell Income that should be reported by Acker in 2012?

• A)$10,000.
• B)$24,000.
• C)$36,000.
• D)$38,400.
• E)$40,000.

Appreciate the importance of empirical evidence in supporting psychological theories and hypotheses.

Recognize the application of psychology in addressing health issues and promoting well-being.

Understand the basic structure and purpose of theories and hypotheses in scientific research.

Distinguish between different types of research methods (e.g., descriptive, experimental) and understand their purposes.

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Definitions:

Risk-free Rate

The rate of return of an investment with no risk of financial loss, typically represented by the yield on government bonds.

Complete Portfolio

A diversified investment portfolio that contains a mix of assets in varying proportions, tailored to an investor's financial goals, risk tolerance, and investment horizon.

After-inflation, After-tax

A financial metric that reflects the real purchasing power of earnings or investment returns after accounting for inflation and taxation.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's cost.