1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
irina [24]
3 years ago
7

Cashen Co. paid $2,400,000 to acquire all of the common stock of Janex Corp. on January 1, 2017. Janex's reported earnings for 2

017 totaled $432,000, and it paid $120,000 in dividends during the year. The amortization of allocations related to the investment was $24,000. Cashen's net income, not including the investment, was $3,180,000, and it paid dividends of $900,000.
What is the amount of consolidated net income for the year 2010?
(A) $3,180,000.
(B) $3,612,000.
(C) $3,300,000.
(D) $3,588,000.
(E) $3,420,000.
Business
1 answer:
andrew-mc [135]3 years ago
8 0

Answer:

(D) $3,588,000.

Explanation:

Consolidated net income is defined as the sum of net income of the parent company (minus income from investment in subsidiary and unrealized income from downstream sales) plus net income of subsidiaries, which results after deducting depreciation (or amortization), income from transactions with the parent company and unrealized gains in inventories.

In the example, the parent company is Cashen Co. and the subsidiary is Janex´s. Recall that a parent company is one that owns more than 50 percent of the shares of the subsidiary, in this case, it is 100%.

According to the information provided, Cashen Co's net income was $ 3,180,000 and neither income from investment in subsidiary nor unrealized income from downstream sales is reported, so it is not necessary to subtract anything.

On the other hand, we know that Janex´s reported earnings totaled $432,000. However, the amortization of allocations related to the investments ($ 24,000) must be subtracted here. Therefore, the net income of that company was $408,000 ($432.000 - $24.000).

Finally, we add the net income of both companies. That is, $ 3,180,000 + $ 408,000 = $ 3,588,000.

<em>Note: I want to point out that there is a typo in the question. It says: "What is the amount of consolidated net income for the year 2010?", instead of "What is the amount of consolidated net income for the year 2017?"</em>

You might be interested in
Sentence or a short
Kaylis [27]

Look at the very last page (page 2) of this pdf, does it help?

https://www.monmouth.edu/resources-for-writers/documents/bluebook-explanatory-parentheticals.pdf/

4 0
2 years ago
Nora has heard that opening a lot of credit card accounts is a good way to build credit. She currently has five cards, but is so
Sladkaya [172]
This is a bad move. You should work on getting a high credit score on one card not multiple.
8 0
3 years ago
A monopolist faces a demand curve given by: P = 220 – 3Q, where P is the price of the good and Q is the quantity demanded. The m
Montano1993 [528]

Answer:

$1350

Explanation:

To find dead weight loss we will take into consideration the price and output level of both monopoly and perfect competition.

Dead weight loss = {(P2 - P1) * (Q1-Q2)} / 2

Where, P2 and Q2 are price and quantity respectively of monopolist and P1 and Q1 are price and quantity respectively of perfect competiton.

Dead weight loss = {(130-40) * (60-30)}/2

= (90*30)/2

= $1350

8 0
2 years ago
Shirley Macuga is the world’s fastest typist and is also a world famous brain surgeon. She earns $5,000/hour operating on brains
mote1985 [20]

Answer:

Yes

Explanation:

30 mins of typing would have an opportunity cost of $2500 of surgery

She's paying $2000 and earning $2500.

So she is smart

8 0
3 years ago
Airline a and airline b are the two largest airlines in the country. the chief executive officer of airline a calls the chief ex
Sveta_85 [38]
I would say this type of arrangement between the two largest airlines could be considered a type of cartel whereby most or a high % of the airline passenger market is controlled mostly by two airlines so they think they can raise prices unilaterally.
4 0
3 years ago
Other questions:
  • Which of the following describes a process in which marketers present an accurate description of a new product to potential cust
    6·2 answers
  • Whenever the production of a good creates negative externalities, an unregulated market will result in:
    8·1 answer
  • The following information describes a​ company's usage of direct labor in a recent​ period: Actual direct labor hours used 33 co
    8·1 answer
  • The buyer of a futures contract A. assumes the short position. B. may not sell the contract without the permission of the origin
    5·1 answer
  • Which of these is NOT human capital?
    9·1 answer
  • In a cap-and-trade system, ______ set(s) a regulatory cap (limit) on emissions and issue(s) pollution permits, and ______ can bu
    12·1 answer
  • At the output level defining allocative efficiency: Group of answer choices the maximum willingness to pay for the last unit of
    5·1 answer
  • According to the capital asset pricing model, what is the expected return on a security with beta of 1?
    8·1 answer
  • An employee time ticket is an hour-by-hour summary of the employee’s activities throughout the day. True or false?.
    9·1 answer
  • When a person incorporates unimportant events within a delusional framework and reads personal significance into trivial activit
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!