The Salmon Corporation (Salmon)reported Net Income for the Current Year

question 27

Multiple Choice

The Salmon Corporation (Salmon) reported net income for the current year of $200,000 and paid cash dividends of $30,000.The Pond Company (Pond) holds 22 percent of the outstanding voting stock of Salmon.However,another corporation holds the other 78 percent ownership and does not take Pond's input into consideration when making financing and operating decisions for Salmon.What investment income should Pond recognize for the current year?

• A)$6,600
• B)$0
• C)$44,000
• D)$50,600

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Definitions:

Collection Delay

The time lapse between when a payment is made by a customer and when the funds become available to the recipient company.

Average Amount

The mean sum of a group of numbers, calculated by dividing the total by the quantity of numbers.

Weighted Average Float

The average time between when a check is deposited in a bank and when the funds are available.