Gargiulo Company, a 90% Owned Subsidiary of Posito Corporation, Sells

question 74

Multiple Choice

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 intra-entity purchases. Gargiulo was acquired on January 1, 2010.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the equity in earnings of Gargiulo reported on Posito's books for 2012.

• A) $84,600.
• B) $84,375.
• C) $83,925.
• D) $84,825.
• E) $84,850.

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Definitions:

Carbon Dioxide Emissions

Refers to the release of carbon dioxide into the atmosphere, primarily due to fossil fuel burning and deforestation, contributing to global climate change.

Consumer Behavior

The study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.

Reference Groups

Groups that individuals refer to when making purchasing decisions or when evaluating their personal qualities.

Dissociative Reference Group

A group that an individual does not want to associate with, and therefore takes steps to distance themselves from in their purchasing decisions or behaviors.