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Kroger Corporation acquired a 60% interest in Food Lion Corporation in January 2016, when Food Lion's book values and fair values were equal. On July 1,216, Kroger sold a building with a book value of $300,000 to Food Lion for $375,000. The building has a remaining life of 15 years, no salvage value, and depreciated used the straight-line method. Food lion reports net income of $160,000 for 2016. Kroger's income from Food Lion for 2016 is: a. $18,500 b. $21,000 c. $23,500 d. $96,000 e. None of the above

Kroger Corporation acquired a 60% interest in Food Lion Corporation in January 2016, when Food Lion's book values and fair values were equal. On July 1,216, Kroger sold a building with a book value of $300,000 to Food Lion for $375,000. The building has a remaining life of 15 years, no salvage value, and depreciated used the straight-line method. Food lion reports net income of $160,000 for 2016. Kroger's income from Food Lion for 2016 is: a. $18,500 b. $21,000 c. $23,500 d. $96,000 e. None of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kroger Corporation acquired a 60% interest in Food Lion Corporation in January 2016, when Food Lion's book values and fair values were equal. On July 1,216, Kroger sold a building with a book value of $300,000 to Food Lion for $375,000. The building has a remaining life of 15 years, no salvage value, and depreciated used the straight-line method. Food lion reports net income of $160,000 for 2016. Kroger's income from Food Lion for 2016 is: a. $18,500 b. $21,000 c. $23,500 d. $96,000 e. None of the above
Transcribed Image Text:Kroger Corporation acquired a 60% interest in Food Lion Corporation in January 2016, when Food Lion's book values and fair values were equal. On July 1,216, Kroger sold a building with a book value of $300,000 to Food Lion for $375,000. The building has a remaining life of 15 years, no salvage value, and depreciated used the straight-line method. Food lion reports net income of $160,000 for 2016. Kroger's income from Food Lion for 2016 is: a. $18,500 b. $21,000 c. $23,500 d. $96,000 e. None of the above
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