Gargiulo Company, a 90% Owned Subsidiary of Posito Corporation, Sells

question 47

Multiple Choice

Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2010. Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends. Compute the equity in earnings of Gargiulo reported on Posito's books for 2010.

• A) $63,000.
• B) $62,730.
• C) $63,270.
• D) $70,000.
• E) $62,700.

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Definitions:

Uncertainty Reduction

The process through which individuals, groups, or organizations gather information to decrease the level of uncertainty about future events or behaviors.

Job Satisfaction

The level of contentment or happiness an individual feels towards their job role, considering aspects such as work environment and compensation.

Psychological Contract

An unwritten agreement that exists between an employer and employees, outlining mutual expectations including attitudes, behaviors, and contributions.

Confidential Disclosure Agreement

A legal contract that outlines the information that one or more parties agree to share with each other and the restrictions on its use.