Use the Following Information to Answer the Question(s) Below

question 3

Multiple Choice

Use the following information to answer the question(s) below.

Paint Corporation owns 82% of Achille Corporation and Achille Corporation owns 80% of Badrack Corporation. For the current year, the separate net incomes (excluding investment income) of Paint, Achille, and Badrack are $120,000, $100,000, and $50,000, respectively. The cost of each investment was equal to the book value of the investment, which was also equal to the fair value.


-Controlling interest share of consolidated net income for Paint Corporation and Subsidiaries is:

• A)$234,800.
• B)$244,800.
• C)$260,000.
• D)$270,000.

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Definitions:

Issue Price

The initial price at which securities are offered to the public.

Annual Dividend

The total dividend payment a shareholder receives from a company over the course of a year, often expressed as a per share amount.

Flotation Cost

Flotation cost is the total cost incurred by a company in offering its securities to the public for sale, including underwriting, legal, and registration fees.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.