REFERENCE: Ref.05_05 Gargiulo Company,a 90% Owned Subsidiary of Posito Corporation,sells Inventory to Inventory

question 45

Multiple Choice

REFERENCE: Ref.05_05
Gargiulo Company,a 90% owned subsidiary of Posito Corporation,sells inventory to Posito at a 25% profit on selling price.The following data are available pertaining to intercompany purchases.Gargiulo was acquired on January 1,2009.
Assume the equity method is used.The following data are available pertaining to Gargiulo's income and dividends.

-Compute the income from Gargiulo reported on Posito's books for 2009.

• A)$63,000.
• B)$62,730.
• C)$63,270.
• D)$70,000.
• E)$62,700.

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Definitions:

Net Exports

The value of a country's total exports minus the value of its total imports. It is a component of a country’s GDP.

Federal Reserve System

The main banking authority in the United States, tasked with setting monetary policy, overseeing banks, ensuring the financial system's stability, and offering financial services.

M1

Currency, checking deposits, and check-like deposits.

Destroy Money

Refers to actions taken by central banks to reduce the amount of money in circulation, often through selling securities, which can help control inflation.