Solved

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

question 5

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:

-Bailey's noncontrolling interest share for 2014 is

Definitions:

Brand Equity

is the value and strength a brand possesses, stemming from consumers' perceptions, recognition, and loyalty.

Category Extension

When a brand expands its existing product line into new categories to reach new markets or segments, leveraging its brand equity.

Resource Use

The manner in which resources are utilized and managed within a system, be it in business operations, environmental contexts, or economic activities.

Brand Capabilities

The skills, resources, and strengths that enable a brand to achieve its goals and perform effectively.