On January 1, 2010, Cale Corp

question 98

Multiple Choice

On January 1, 2010, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts:

Kaltop earned net income for 2010 of $126,000 and paid dividends of $48,000 during the year.
If Cale Corp. had net income of $444,000 in 2010, exclusive of the investment, what is the amount of consolidated net income?

• A) $569,000.
• B) $570,000.
• C) $571,000.
• D) $566,400.
• E) $444,000.

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Definitions:

Oppressive Conduct

Actions by major stakeholders in a corporation that unfairly prejudice the interests of minority shareholders.

Articles Of Incorporation

Legal documents filed with a governmental body to legally document the creation of a corporation, detailing key aspects such as name, purpose, and structure.

Bylaws

Written rules and regulations adopted by an organization or community to govern its actions and ensure structured management.

Corporate Assets

All tangible and intangible assets owned by a corporation, including cash, property, intellectual property, and goodwill, used in the operation of the business.