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

question 39

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.


-The amount of income for the current year assigned to the noncontrolling shareholders of Badock Corporation is

• A)$100,000.
• B)$104,000.
• C)$120,000.
• D)$140,000.

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Definitions:

Wage Rate

The amount of money paid to a worker per unit of time, which can be expressed as an hourly, daily, or piece rate.

Product Price

The amount of money required to purchase a good or service, often influenced by a variety of factors including production costs, demand, and market competition.

Marginal Revenue Product

The extra income created by the use of an additional unit of a production input.

Marginal Resource Cost

Marginal Resource Cost is the additional cost incurred by obtaining one more unit of a resource, such as labor or raw materials, used in the production of goods and services.