REFERENCE: Ref.05_10 Stark Company,a 90% Owned Subsidiary of Parker,Inc. ,Sold Land to Land

question 90

Multiple Choice

REFERENCE: Ref.05_10
Stark Company,a 90% owned subsidiary of Parker,Inc. ,sold land to Parker on May 1,2009,for $80,000.the land originally cost Stark $85,000.Stark reported net income of $200,000,$180,000,and $220,000 for 2009,2010,and 2011,respectively.Parker sold the land it purchased from Stark in 2009 for $92,000 in 2011.
-Compute income from Stark reported on Parker's books for 2011.

• A)$204,300.
• B)$202,500.
• C)$193,500.
• D)$191,700.
• E)$225,000.

---

Definitions:

Exclusive Managerial Control

A business arrangement where one party has the sole authority and responsibility for managing an organization or project.

General Partner

A member of a partnership who has unlimited liability for the debts of the business and participates in its management.

Limited Partner

An investor in a partnership whose liability is limited to the amount of their investment, with no direct involvement in the management of the business.

General Partners

A reworded definition: Members of a partnership who share unlimited liability for the debts and obligations of the business and actively manage its affairs.