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

Multiple Choice

On January 1,20X8,Putter Corporation acquired 40 percent of the voting shares of Shank Company for $65,000.Shank reported net income of $45,000 and paid dividends of $10,000 in 20X8.Putter 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 Putter report as net income (after taxes) for the year?

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