The Following Information Pertains to Questions

question 37

Multiple Choice

The following information pertains to questions
LEO Inc.acquired a 60% interest in MARS Inc.on January 1,2008 for $400,000.LEO uses the Cost method to account for its investment MARS Inc.On that date,MARS had common stock and retained earnings valued at $100,000 and $150,000 respectively.The acquisition differential was allocated as follows:
$80,000 to inventory.
$40,000 to equipment (To be amortized over 20 years)
The following took place during 2008:
MARS reported a net income and declared dividends of $25,000 and $5,000 respectively.
LEO's December 31,2008 inventory contained an intercompany profit of $10,000.
LEO's net income was $75,000.
The following took place during 2009:
MARS reported a net income and declared dividends of $36,000 and $6,000 respectively.
MARS' December 31,2009 inventory contained an intercompany profit of $5,000.
LEO's net income was $48,000.
Both companies are subject to a 25% tax rate.All intercompany sales as well as sales to outsiders are priced to provide the selling company with gross Margin of 20%.
-Consolidated Net Income for 2009 would be:

• A)$69,150
• B)$57,850
• C)$58,000
• D)$56,000

Identify the factors that influence consumer purchasing decisions.

Grasp the role and impact of competitive advantage in marketing.

Recognize the importance of analyzing buying behavior for targeting markets.

Comprehend the relationship between sales forecasting and marketing planning.

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Definitions:

Simplest Formula

A type of chemical formula that gives the smallest whole-number ratio of the component atoms. Compare with molecular formula and structural formula.

Chemical Reaction

A process that leads to the chemical transformation of one set of chemical substances to another.

Ionic Bond

The chemical attraction between a cation and an anion.

Equilibrium

See dynamic equilibrium, genetic equilibrium, and punctuated equilibrium.