Use the Following Information to Answer the Question(s) Below $P =$

question 24

Multiple Choice

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

Paiva Corporation owns 80% of Ackroyd Corporation's outstanding common stock and Ackroyd owns 80% of the outstanding common stock of Bailey Corporation. Bailey Corporation owns 10% of the outstanding common stock of Ackroyd Corporation. The cost of the investments was equal to book value and there were not fair value/book value differences for the investments. The separate net incomes for the three affiliated companies for the year ended December 31, 2014 (excluding investment income) are as follows: Paiva Corporation, $100,000, Ackroyd Corporation, $50,000, and Bailey Corporation, $30,000. Use the conventional approach.

Symbols used:
$P =$ Income of Paiva on a consolidated basis
A = Income of Ackroyd on a consolidated basis
B = Income of Eailey on a consolidated basis
-The equation,in a set of simultaneous equations,that computes Paiva Corporation income on a consolidated basis is

• A)P = $50,000 + 0.8B.
• B)P = $30,000 + 0.2A.
• C)P = $100,000 + 0.2A.
• D)P = $100,000 + 0.8A.

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Definitions:

Consumer Incomes

The total earnings received by consumers, including wages, salaries, benefits, and other income sources, which affect their purchasing power.

Farm Income

The earnings from agricultural operations, including the sale of crops, livestock, and other farm-related sources.

Farm Household

A living arrangement where families live and work primarily on a farm producing agricultural goods.

Demand For Agricultural Products

The consumer need or desire for products originating from farming and agriculture.