West Corp Owned 70% of the Voting Common Stock of East

question 35

Multiple Choice

West Corp. owned 70% of the voting common stock of East Co. East owned 60% of Compass Co. West and East both used the initial value method to account for their investments. The following information was available from the financial statements and records of the three companies: Operating income included unrealized intra-entity gains (which are related to inventory transfers) but did not include dividend income from investment in subsidiary.
What amount should have been reported for consolidated net income?

• A) $1,285,000.
• B) $1,331,700.
• C) $1,349,000.
• D) $1,315,000.
• E) $1,314,900.

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Definitions:

Philosophical Tradition

A historical school of thought or a set of doctrines that shapes the field of philosophy.

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Ceremonial acts followed in religious practices, often symbolic in nature, aimed at fostering spiritual experiences or honor deities.

Ibn-Rushd

A medieval Andalusian polymath known in the Western world as Averroes, who made significant contributions to philosophy, theology, and medicine.

Al-Farabi

A renowned philosopher and scientist in the Islamic golden age, who made notable contributions in philosophy, logic, and music.