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

question 28

Multiple Choice

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

Pahm Corporation owns 80% of the outstanding voting common stock of Abussi Corporation, which was purchased for $60,000 over Abussi's book value. The excess purchase price was attributable to goodwill. Abussi Corporation owns 60% of the outstanding common stock of Badock Corporation, which was purchased at book value. The separate net incomes of Pahm, Abussi, and Badock (excluding investment income) for the year are $200,000, $240,000, and $260,000, respectively. There were no fair value/book value differences in the assets and liabilities of Pahm, Abussi and Badock.


-Controlling interest share of consolidated net income for the current year is

• A)$504,800.
• B)$516,800.
• C)$545,200.
• D)$557,200.

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders as determined by the board of directors.

Competitive Marketplace

A market structure characterized by a high level of competition among businesses, where companies strive to attract customers by offering better quality, lower prices, or other advantages.

Fair Pricing Practices

Ethical strategies and actions taken by businesses to set prices that are honest and equitable for consumers and for the market.

Foreign Currency Fluctuations

Changes in the value of a country’s currency relative to the currency of another country; can influence consumer spending.