if the treasury stock approach is used pet rsquo s income and controlling share of c 575253

Mutually held parent stock

Pet Corporation owns 90 percent of Sod Corporation’s common stock and Sod owns 15 percent of Pet, both acquired at fair value equal to book value. Separate incomes and dividends of the affiliates for 2011 are as follows:

. If the treasury stock approach is used, Pet’s income and controlling share of consolidated net income for 2011 will be computed:

a $100,000 + (90% x $60,000)

b $100,000 + (90% x $67,500)

c $100,000 + (90% x $67,500) (90% x $30,000)

d ($100,000 + $60,000) (10% x $67,500)