Purple, Inc., a domestic corporation, owns 100% of Blue, Ltd., a foreign corporation and Yellow, Inc., a domestic corporation. Purple also owns 40% of Green, a domestic corporation. Purple receives no distributions from any of these corporations. Which of these entities' net income is included in Purple's GAAP income statement for current-year financial reporting purposes?

a. Purple, Blue, and Yellow.

b. Purple, Yellow, and Green.

c. Purple, Blue, Yellow, and Green.

d. Purple, Blue, and Green.

Question

Business

Pooh Bear

7 May, 02:17

Purple, Inc., a domestic corporation, owns 100% of Blue, Ltd., a foreign corporation and Yellow, Inc., a domestic corporation. Purple also owns 40% of Green, a domestic corporation. Purple receives no distributions from any of these corporations. Which of these entities' net income is included in Purple's GAAP income statement for current-year financial reporting purposes?

a. Purple, Blue, and Yellow.

b. Purple, Yellow, and Green.

c. Purple, Blue, Yellow, and Green.

d. Purple, Blue, and Green.

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Answers (1)

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Dylan Fernandez · Answer 1

Answer: a. Purple, Blue, and Yellow.

Explanation: he does not have a controlling interest in green yet because it's percentage of control is still below 50% so it cannot report green's income.