On January 1, 2018, the Regal Company purchased 30% of the outstanding voting stock of the Air Corporation for $300,000; the book value of Air's net assets at the date of purchase was $900,000. Regal was willing to pay more than the book value of the acquired shares because Air's depreciable assets with a ten-year remaining life were undervalued. Regal uses straight-line depreciation. During 2018, Air reported net income of $75,000 and paid dividends of $30,000.Regal has elected the fair value option to account for equity method investments. The fair value of the Air investment as of December 31,2018 was $295,000. The carrying value of the Air investment on December 31, 2018 was
A. $295,000
B. $313,500
C. $300,000
D. $310,500
Answer: A
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Mitchell Company prepares monthly financial statements and will record.a prepaid account for each of the following except:
a. Mitchell paid for three months of window washing services in advance. b. Mitchell purchases a four-year casualty insurance policy. c. A tenant that pays Mitchell for six months of rent in advance. d. Mitchell purchases office supplies to last for several months.
An employee stock ownership plan denies employees the right to participate in votes by shareholders even if the stock is registered on a national exchange.
Answer the following statement true (T) or false (F)
The increase in the number of sources and data formats due to improved data capture technologies is an example of Big Data variety
a. True b. False
Regarding impairment of intangible assets, which of the following statements is incorrect?
A) Impairment occurs when the fair value of an intangible asset is less than the book value. B) Intangible assets are impaired when there has been a permanent decline in the value of the asset. C) Intangible assets are tested for impairment annually. D) If any impairment occurs, the company records a loss in the period in which the intangible asset was acquired.