REFERENCE: Ref.05_11 Pepe,Incorporated Acquired 60% of Devin Company on January 1,2009.On That

question 55

Multiple Choice

REFERENCE: Ref.05_11
Pepe,Incorporated acquired 60% of Devin Company on January 1,2009.On that date Devin sold equipment to Pepe for $45,000.The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years.Devin reported net income of $300,000 and $325,000 for 2009 and 2010,respectively.Pepe uses the equity method to account for its investment in Devin.
-Compute the income from Devin reported on Pepe's books for 2009.

• A)$174,600.
• B)$184,800.
• C)$172,000.
• D)$171,000.
• E)$180,600.

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Definitions:

Delegation

The process of assigning responsibility and authority to someone else to carry out specific activities, while the person delegating retains overall responsibility for the outcome.

Management Techniques

Methods and strategies used by leaders and managers to increase efficiency, effectiveness, and to achieve organizational goals.

Takeoff Stage

A phase in economic development or in the growth of a business when rapid growth is initiated, often following a period of investment or innovation.

Single Department

Refers to a unit or division within an organization that focuses on a specific area of operation or function.