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

question 87

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 Lawrence's accrual-based income for 2011.

• A) $354,000.
• B) $329,500.
• C) $334,000.
• D) $265,000.
• E) $344,500.

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Definitions:

Relaxed

A state of being free from tension and anxiety.

Conditioned Response

A learned response to a previously neutral stimulus that becomes associated with a conditioned stimulus through conditioning.

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A tool used by dentists to remove decay from teeth and prepare them for fillings.

Cringing

A physical or emotional reaction of discomfort, embarrassment, or fear, often characterized by shrinking back or cowering.