1.6 If the Investor Company owns 20% of the stock of the Investee Company and the Investee Company reports a profit of R100 000, then how much should an Investor Company report as an equity income? (2)
A. R80 000
B. R20 000
C. R100 000
D. R60 000
1.7 If the parent undertaking owns 60% of subsidiary Lev Ltd and Lev Ltd owns 40% of another subsidiary Hinds Ltd. What percentage of Hinds Ltd is owned by the parent company? (2)
A. 12%
B. 40%
C. 60%
D. 24%
1.6 The Investor Company should report an equity income of R20,000.
1.7 The parent company owns 24% of Hinds Ltd. The correct answer is D. 24%.