The Following Information Pertains to Questions

question 12

Multiple Choice

The following information pertains to questions
The following information pertains to the shareholdings of an affiliated group of companies.The respective ownership interest of each company is outlined below.
A Inc.:
A Inc.owns 75% of J Inc.and 60% of G Inc.
J Inc.:
J Inc.owns 60% of D Inc.and 20% of G Inc.
G Inc.:
G Inc.owns 10% of J Inc.and 80% of Y Inc.
All intercompany investments are accounted for using the equity method.
The Net Incomes for these companies for the year ended December 31,2009 were as follows: Unrealized intercompany profits earned by the various companies for the year ended December 31,2009 are shown below: All companies are subject to a 25% tax rate.
-What is the Consolidated Net Income for the year?

• A)$2,170,000
• B)$660,000
• C)$1,510,000
• D)$1,773,625

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Definitions:

Graphing Calculator

A handheld calculator that is capable of plotting graphs, solving simultaneous equations, and performing other tasks with variables.

Standard Viewing Window

The default range of values on the x-axis and y-axis that are displayed on a graphing calculator's screen or graphing software.

Absolute Value

The distance of a number from zero on the real number line, without regard to direction; represented as \(|x|\).

Correct Equation

An equation that accurately represents a mathematical relationship or problem.