On January 1, 2010, Smeder Company, an 80% Owned Subsidiary

question 48

Multiple Choice

On January 1, 2010, Smeder Company, an 80% owned subsidiary of Collins, Inc., transferred equipment with a 10-year life (six of which remain with no salvage value) to Collins in exchange for $84,000 cash. At the date of transfer, Smeder's records carried the equipment at a cost of $120,000 less accumulated depreciation of $48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2010 and 2011, respectively. All net income effects of the intra-entity transfer are attributed to the seller for consolidation purposes. Compute Collins' share of Smeder's net income for 2011.

• A) $27,600.
• B) $23,600.
• C) $27,200.
• D) $24,000.
• E) $34,000.

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Definitions:

Anti-Social Behaviour

Actions that harm or lack consideration for the well-being of others, often violating social norms and laws.

Biological Perspective

An approach in psychology that examines behaviors, emotions, and thoughts through the lens of biological processes, such as genetics and neurochemistry.

Deviant Learning Environment

A situation or context where individuals learn to engage in behavior that deviates from the socially accepted norm.

Differential Association

A theory in criminology suggesting that individuals learn deviant behavior from those close to them who provide models of and opportunities for deviance.