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

question 21

Multiple Choice

Use the following information to answer the question(s) below.
On January 1,2011,Pamplin Corporation stockholders' equity consisted of $1,000,000 of $10 par value Common Stock,$750,000 of Additional Paid-in Capital,and $3,000,000 of Retained Earnings.On January 1,2011,Pamplin purchased 90% of the outstanding common stock of Sage Corporation for $1,500,000 with all excess purchase cost assigned to goodwill.The stockholders' equity of Sage on this date consisted of $800,000 of $100 par value,8% cumulative,preferred stock callable at $105,$900,000 of $10 par value common stock and $500,000 of Retained Earnings.Sage's net income for 2011 was $100,000.
On January 1,2011,no preferred dividends are in arrears.No dividends are declared or paid in 2011.In a separate transaction on January 1,2011,Pamplin purchased 70% of Sage's preferred stock for $600,000.
-For the year ending December 31,2011,the amount of Pamplin's income from Sage (associated with the common stock investment in Sage) is

• A)$32,400.
• B)$36,000.
• C)$60,000.
• D)$90,000.

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Definitions:

Intuition

The ability to understand or know something immediately based on a feeling rather than conscious reasoning.

Judgment

The ability to make considered decisions or form sensible opinions, especially by weighing evidence and assessing the implications of choices.

Five Rights Medication Verification System

A guideline aiming to ensure patient safety by verifying the right patient, drug, dose, route, and time when administering medication.

Medication Errors

Mistakes in prescribing, dispensing, or administering medication, often leading to harmful effects on the patient.