Ensley Company and Bac Company Have Separate Incomes of $140,000

question 33

Multiple Choice

Ensley Company and Bac Company have separate incomes of $140,000 and $240,000,respectively.They had intercompany purchases and sales of $40,000 and intercompany interest of $2,000.Consolidated net income is

• A) $422,000.
• B) $380,000.
• C) $338,000.
• D) $142,000.

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Definitions:

Equal Payments

Regular payments of the same amount made over a period of time.

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods once a year.

Interest

The fee or rent that lenders charge for the use of their money.

Third Payment

The third installment of a payment series as agreed upon in a financial transaction or repayment plan.