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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Investment recording methods. Solara Corporation is considering investing in Focus Corporation, but is unsure about what level of ownership should be undertaken. Solara and Focus have the following reported incomes:
|
Solara |
Focus |
|
|
Sales |
$640,000 |
$370,000 |
|
Cost of goods sold |
300,000 |
230,000 |
|
Gross profit |
$340,000 |
$140,000 |
|
Selling and administrative expenses |
120,000 |
75,000 |
|
Net income |
$220,000 |
$65,000 |
Focus paid $15,000 in cash dividends to its investors. Prepare a pro forma income statement for Solara Corporation that compares income under 10%, 20%, and 70% ownership levels.
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