Acker Inc Bought 40% of Howell Co

question 79

Multiple Choice

Acker Inc. bought 40% of Howell Co. on January 1, 2010 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows:

Howell reported net income of $100,000 in 2010 and $120,000 in 2011 while paying $40,000 in dividends each year.
What is the balance in Acker's Investment in Howell account at December 31, 2010?

• A) $576,000.
• B) $598,400.
• C) $614,400.
• D) $606,000.
• E) $616,000.

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Definitions:

Intersectionality

A concept highlighting the interconnection of social categorizations such as race, class, and gender as they apply to a given individual or group, creating overlapping systems of discrimination or disadvantage.

Colonialism

The political and economic domination by one country over a geographically separate and distinct area and its indigenous population, often involving exploitation.

Sociologist

A social scientist who studies the social behaviors, structures, institutions, and functions of human society.

Western Science

The scientific traditions, methodologies, and practices that originated and developed in the Western world, often contrasted with Indigenous or non-Western approaches to knowledge.