On January 1, 2010, Franel Co

question 19

Multiple Choice

On January 1, 2010, Franel Co. acquired all of the common stock of Hurlem Corp. For 2010, Hurlem earned net income of $360,000 and paid dividends of $190,000. Amortization of the patent allocation that was included in the acquisition was $6,000. How much difference would there have been in Franel's income with regard to the effect of the investment, between using the equity method or using the partial equity method of internal recordkeeping?

• A) $170,000.
• B) $354,000.
• C) $164,000.
• D) $6,000.
• E) $174,000.

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Definitions:

Integumentary

Pertaining to the skin and its appendages, which protect the body from external harm and assist in maintaining homeostasis.

Cyst/o

In medical terminology, a prefix relating to the bladder or a cyst, which is a fluid-filled sac or cavity in the body.

Tricuspid Valve

One of the heart's four valves, located between the right atrium and the right ventricle, functioning to regulate blood flow within the heart.

Osteitis

Inflammation of the bone, often resulting from infection, which can lead to bone pain, localized warmth, and erythema over the affected area.