Small-Town Retail Owns 70 Percent of Supplier Corporation's Common Stock

question 37

Multiple Choice

Small-Town Retail owns 70 percent of Supplier Corporation's common stock. For the current financial year, Small-Town and Supplier reported sales of $450,000 and $300,000 and expenses of $290,000 and $240,000, respectively.
-Based on the preceding information,what is the amount of net income to be reported in the consolidated income statement for the year under the proprietary theory approach?

• A) $210,000
• B) $202,000
• C) $160,000
• D) $200,000

---

Definitions:

Hedge

Investment made to reduce the risk of adverse price movements in an asset, often by taking an offsetting position in a related security.

Spot Rates

The current price in the marketplace at which a particular asset can be bought or sold for immediate delivery.

Foreign Currency

Currency used in a country other than one's own, representing the money of another country.

Foreign Currency

Currency used in a country other than one's own, necessitating exchange for transactions or investments in foreign markets.