Barmore Company has the following information pertaining to its two divisions for 2011: Common expenses are $12,000 for 2011.
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What is the net income for Barmore Company?

Question

Barmore Company has the following information pertaining to its two divisions for 2011:  Common expenses are $12,000 for 2011.
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What is the net income for Barmore Company?

Quizplus · Accepted Answer

The net income of Division X is $250,000 ($350,000 - $100,000), and the net income of Division Y is $70,000 ($100,000 - $30,000). Therefore, the total net income for the company is $320,000 ($250,000 + $70,000), and subtracting the common expenses of $12,000 gives a final net income of $308,000. The answer choice that is closest to this number is B ($20,500 off). The other answer choices are significantly off and can be eliminated.

Barmore Company Has the Following Information Pertaining to Its Two