Multiple Choice
The following information pertains to the shareholdings of an affiliated group of companies. The respective ownership interest of each company is outlined below. A Inc.:
A Inc. owns 75% of J Inc. and 60% of G Inc.
J Inc.:
J Inc. owns 60% of D Inc. and 20% of G Inc.
G Inc.:
G Inc. owns 10% of D Inc. and 80% of Y Inc.
All intercompany investments are accounted for using the equity method.
The Net Incomes for these companies for the year ended December 31, 2020 were as follows:
Unrealized intercompany profits (pre-tax) earned by the various companies for the year ended December 31, 2020 are shown below:
All companies are subject to a 25% tax rate.
What is the Consolidated Net Income for the year attributable to the shareholders of A Inc.?
A) $1,510,000
B) $1,796,125
C) $1,817,500
D) $2,170,000
Correct Answer:

Verified
Correct Answer:
Verified
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