Chase Company owns 80% of Lawrence Company and 40% of Ross Company. Lawrence Company also owns 30% of Ross Company. Separate company net incomes for 2021 of Chase, Lawrence, and Ross are $450,000, $300,000, and $250,000, respectively. Each company also defers a $20,000 intra-entity gain in its current income figures. Excess annual amortization expense of $15,000 is assigned to Chase's investment in Lawrence and another $15,000 is assigned to Lawrence's investment in Ross.Compute Chase's attributed ownership in Ross.
A) 40.0%.
B) 64.0%.
C) 24.0%.
D) 32.0%.
E) 12.8%.

Question

Quizplus · Accepted Answer

Chase's attributed ownership in Ross is calculated by adding its direct ownership (40%) and its indirect ownership through Lawrence (80% of Lawrence's 30% ownership in Ross), which is 24%. Therefore, Chase's total attributed ownership in Ross is 40% + 24% = 64%.

Chase Company Owns 80% of Lawrence Company and 40% of Ross