Chase Company Owns 80% of Lawrence Company and 40% of Ross

question 18

Multiple Choice

Chase Company owns 80% of Lawrence Company and 40% of Ross Company. Lawrence Company also owns 30% of Ross Company. Separate operating incomes for 2011 of Chase, Lawrence, and Ross are $450,000, $300,000, and $250,000, respectively. Each company also retains a $20,000 unrealized gain in their current income figures. Annual amortization expense of $15,000 is assigned to Chase's investment in Lawrence and another $15,000 is assigned to Lawrence's investment in Ross.
-Compute Chase's accrual-based income for 2011.

• A) $746,000.
• B) $719,000.
• C) $779,600.
• D) $774,200.
• E) $758,100.

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Definitions:

Phobic Reactions

Excessive and irrational fear responses to specific objects, situations, or activities, leading to avoidance behavior.

Obsessive-Compulsive Disorder

A disorder characterized by unwanted repetitive thoughts (obsessions) and/or actions (compulsions).

Compulsive Behaviors

Actions repeatedly performed in a ritualistic manner, often in response to an obsessive thought or anxiety, despite a desire to resist them.

Reinforcement

In behavioral psychology, the process of encouraging or establishing a pattern of behavior by offering rewards or consequences.