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17 January, 09:47

Create, Inc., a domestic corporation, owns 100% of Vinyl, Ltd., a foreign corporation and Digital, Inc., a domestic corporation. Create also owns 12% of Record, Inc., a domestic corporation. Create receives no distributions from any of these corporations. Which of these entities' net income is included in Create's income statement for current-year financial reporting purposes?

a. Create, Vinyl, and Digital.

b. Create, Digital, and Record.

c. Create, Vinyl, Digital, and Record.

d. Create, Vinyl, and Record.

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  1. 17 January, 09:52
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    c. Create, Vinyl, Digital, and Record

    Explanation:

    The answer is

    c. Create, Vinyl, Digital, and Record

    Since Create Inc. which is a domestic corporation, owns 100% shares in two enterprises. One is Vinyl Ltd. which is a foreign corporation and the other is Digital Inc. which is a domestic corporation. And Create Inc. also happens to own 12% shares in a domestic corporation named Record Inc.

    Now since Create Inc. owns shares in all the three corporations, all these corporations's net income will be included in the Create's income statement current-year financial report.

    Thus the answer is

    c. Create, Vinyl, Digital, and Record
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