Standard Company has a relatively high profit margin on its sales, and Jewel Company has a substantially lower profit margin. Standard holds 55 percent of Jewel’s common stock and includes Jewel in its consolidated statements. Standard and Jewel reported sales of $100,000 and $60,000, respectively, in 2014. Sales increased to $120,000 and $280,000 for the two companies in 2015.
The average profit margins of the two companies remained constant over the two years at 60 percent and 10 percent, respectively.
Standard’s treasurer was aware that the subsidiary was awarded a major new contract in 2015 and anticipated a substantial increase in net income for the year. She was disappointed to learn that consolidated net income allocated to
the controlling interest had increased by only 38 percent even though sales were 2.5 times higher than in 2014. She is not trained in accounting and does not understand the fundamental processes used in preparing Standard’s consolidated income statement. She does know, however, that the earnings per share figures reported in the consolidated income statement are based on income allocated to the controlling interest and she wonders why that number isn’t higher.
Required:
As a member of the accounting department, you have been asked to prepare a memo to the treasurer explaining how consolidated net income is computed and the procedures used to allocate income to the parent company and to the
subsidiary’s noncontrolling shareholders. Include in your memo citations to or quotations from the authoritative literature.
To assist the treasurer in gaining a better understanding, prepare an analysis showing the income statement amounts actually reported for 2014 and 2015.

Part three of three how are exchange rates determined in a flexible exchange rate system? us dollar compared to the pound inflation and deflation us dollar compared to the euro supply and demand read the statement. country a is running a trade deficit. what must country a do to reverse this trend? it must hire more workers to increase products for export. it must continue the course it is currently following. it must print more money so people will spend more. it must increase trade exports with other countries. what are consequences of a weak dollar? (select all that apply.) increase in the cost of exports unemployment in import industries increase in the cost of imports unemployment in export industries which is an example of regional cooperation to promote economic growth? neighboring countries negotiate tariffs and duties regarding trade. neighboring countries sign a pact to limit immigration into their countries. neighboring countries remain separate but work together to promote peace. neighboring countries set up quotas on resources that can be sold. why would wealthy nations have an interest in the development of poor nations? (select all that apply.) it opens up new markets for goods and services. it leads to migration between the countries. they want to improve tariff revenues with imports. they feel an ethical or moral obligation to do so. how can the world bank developing nations economically? it can work to remove serious health problems so resources can shift to economic growth. it can provide loans to developing countries to build new infrastructures. it can protect and negotiate free trade deals between neighboring nations. it can sell medical drugs and other treatments to clinics at a very low cost, saving the patients money. which is a characteristic of the takeoff stage of rostow's five stages of economic growth? the population as a whole has its basic needs met and enjoys a high standard of living focused on consumer goods. advancements in technology require a skilled labor force competent in electronics, medicine, and engineering. a country begins to grow rapidly and new industries start to emerge that drive further economic development. the labor of a country is unskilled and focuses on agricultural production, animal husbandry, and the harvesting of timber. how can a developing nation improve its economy if it lacks natural resources? it can default on loans owed to foreign banks. it can place high tariffs on all of its imports. it can engage in international trade. it can flood foreign exchange markets with its currency. how might developing countries obtain funding? (select all that apply.) they can obtain financial assistance from world bank. they can attain microloans from neighboring countries. they can gain loans from private investors. they can acquire grants from foreign countries. what reasons do protectionists cite most for restricting trade? (select all that apply.) to protect national security and prohibit us reliance on other countries to protect us taxpayers from increased income and corporate tax rates to protect us infant industries that tend to have high production costs to protect us jobs due to cheap labor in other countries