FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Santos corporation is considering investing in Fenco corporation but is unsure about what level | ||||||||
of ownership should be undertaken. Santos and Fenco have the following reported incomes | ||||||||
Santos | Fenco | |||||||
Sales ……………………………………………………………… | $700,000 | $450,000 | ||||||
Cost of Goods Sold ……………………………………….. | $300,000 | $300,000 | ||||||
Gross Profit ……………………………………………. | $400,000 | $150,000 | ||||||
Selling and Administrative Expenses……….. | $120,000 | $80,000 | ||||||
Net Income …………………………………………… | $280,000 | $80,000 | ||||||
Fenco paid $15,000 in cash dividends to its investors, Please prepare a pro forma income | ||||||||
statement for Santos corporation that compares income under 15%, 40%, 90%, and 100% | ||||||||
ownership levels. | ||||||||
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