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

question 28

Multiple Choice

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

Pew Corporation acquired 80% ownership of Sordid Incorporated, at a time when Pew's investment cost was equal to 80% of Sordid's book value. At the time of acquisition, the book values and fair values of Sordid's assets and liabilities were equal. Pew uses the equity method. During 2014, Pew sold goods to Sordid for $160,000 making a gross profit percentage of 20%. Half of these goods remained unsold in Sordid's inventory at the end of the year. Income statement information for Pew and Sordid for 2014 were as follows:


-What is Pew's income from Sordid for 2014?

• A)$32,000
• B)$48,000
• C)$60,000
• D)$75,000

---

Definitions:

Anorexia Nervosa

An eating disorder characterized by an extremely low body weight, distorted body image, and an obsessive fear of gaining weight.

Rigidity, Perfectionism

A psychological trait characterized by inflexibility and an overemphasis on flawlessness and order.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight and a refusal to maintain a healthy body weight.

Bulimia Nervosa

An eating disorder characterized by binge eating followed by purging behaviors, such as vomiting or excessive exercise, to prevent weight gain.