On January 1, 20X8, Gulfstream Corporation Acquired 40 Percent of the Voting

Multiple Choice

On January 1, 20X8, Gulfstream Corporation acquired 40 percent of the voting shares of Hunter Company for $65,000. Hunter reported net income of $45,000 and paid dividends of $10,000 in 20X8. Gulfstream reported operating income of $50,000 for the year. There is 80 percent exemption of intercompany dividends and the effective tax rate is 35 percent. Assume that the equity method is being used.
-Based on the preceding information,what amount would Gulfstream report as net income (after taxes) for the year?

A) $49,240
B) $68,000
C) $64,000
D) $67,500