Stiller Company, an 80% Owned Subsidiary of Leo Company, Purchased

question 96

Multiple Choice

Stiller Company, an 80% owned subsidiary of Leo Company, purchased land from Leo on March 1, 2010, for $75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2010 and 2011, respectively. Leo uses the equity method to account for its investment.
-Compute income from Stiller on Leo's books for 2010.

• A) $110,000.
• B) $100,000.
• C) $125,000.
• D) $85,000.
• E) $88,000.

---

Definitions:

Chronic Depression

A prolonged state of depression that can last for years, affecting the individual's ability to function effectively in daily life.

Schizophrenia

A severe mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior, often manifested as hallucinations, delusions, and extremely disordered thinking and behavior.

Apathy

An absence of excitement, passion, or care.

Psychoanalysis

A method of psychological therapy originated by Sigmund Freud, aiming to explore unconscious motives and conflicts through techniques like dream interpretation and free association.