Big Time Company Owns All of the Stock of Peterson

question 22

Multiple Choice

Big Time Company owns all of the stock of Peterson Corporation and 80% of the stock of Tysen Corporation. Big Time Company earned net income of $750,000; Peterson earned $250,000; and Tysen earned $175,000. Big Time Company's consolidated income statement would report net income of:

• A) $1,000,000.
• B) $1,250,000.
• C) $1,140,000.
• D) $1,050,000.

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Definitions:

Hypothetical Country

A theoretical or imaginary nation used for the sake of argument or analysis in economic models or discussions.

Real GDP

Real Gross Domestic Product measures a country's economic output adjusted for price changes, such as inflation or deflation, to reflect the true value of goods and services produced.

Recession

A phase of short-term economic downturn where business activities and manufacturing diminish, usually signaled by two successive quarters of GDP decrease.

Nominal GDP

Measures a country's gross domestic product using current prices, without adjusting for inflation or deflation, providing a raw economic output figure.