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

question 29

Multiple Choice

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

On January 1, 2014, Pamplin Corporation's stockholders' equity consisted of $1,000,000 of $10 par value Common Stock, $750,000 of Additional Paid-in Capital, and $3,000,000 of Retained Earnings. On January 1, 2014, Pamplin purchased 90% of the outstanding common stock of Sage Corporation for $1,500,000 with all excess purchase cost assigned to goodwill. The stockholders' equity of Sage on this date consisted of $800,000 of $100 par value, 8% cumulative, preferred stock callable at $105, $900,000 of $10 par value common stock and $500,000 of Retained Earnings. Sage's net income for 2014 was $100,000.

On January 1, 2014, no preferred dividends are in arrears. No dividends are declared or paid in 2014. In a separate transaction on January 1, 2014, Pamplin purchased 70% of Sage's preferred stock for $600,000.

-For the year ending December 31,2014,the amount of Pamplin's income from Sage (associated with the common stock investment in Sage) is

• A)$32,400.
• B)$36,000.
• C)$60,000.
• D)$90,000.

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Definitions:

Western Media

Media outlets and content originating from or primarily informed by Western cultural perspectives, often characterized by a focus on individualism and democracy.

Benjamin Whorf

An American linguist known for his hypothesis on the relationship between language and thought.

Emotional Experience

The process and state of encountering or undergoing feelings that result from stimuli, events, or relationships.

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A region of the brain located at the front of the frontal lobe, crucial for decision making, planning, and moderating social behavior.