Stanger Company owns 85% of the outstanding stock of Willden Company. At the end of the year, Willden Company reported revenues of $2,500 and expenses of $1,800. How much will Stanger Company report on its own financial statements as income from Willden Company?

Question

Quizplus · Accepted Answer

Stanger Company owns 85% of Willden Company, so it will report 85% of Willden's net income. Willden's net income is $2,500 - $1,800 = $700. Therefore, Stanger will report 85% of $700, which is $595.

Stanger Company Owns 85% of the Outstanding Stock of Willden