On January 1, 20X2, Pint Corporation acquired 80 percent of Size Corporation for $200,000 cash. Size reported net income of $25,000 each year and dividends of $5,000 each year for 20X2, 20X3, and 20X4. On January 1, 20X2, Size reported common stock outstanding of $160,000 and retained earnings of $40,000, and the fair value of the noncontrolling interest was $50,000. It held land with a book value of $90,000 and a market value of $100,000, and equipment with a book value of $40,000 and a market value of $48,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of eight years. All depreciable assets held by Size at the date of acquisition had a remaining economic life of
eight years. Pint uses the equity method in accounting for its investment in Size.Based on the preceding information, what balance would Pint report as its investment in Size at January 1, 20X4?
A. $224,000
B. $240,000
C. $200,000
D. $232,000
Answer: A
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Indicate whether the statement is true or false
What is the present value of a stream of annual end-of-the-year annuity cash flows if the discount rate is 0%, and the cash flows of $50 last for 20 years?
A) Less than $1,000 B) Exactly $1,000 C) More than $1,000 D) This question cannot be answered because we have an interest rate of 0.0%.
Sharpe's measure of portfolio performance compares the risk premium on a portfolio to
A) a broad-based market index such as the S&P 500 index. B) the portfolio's standard deviation of return. C) the portfolio's beta. D) the prevailing risk-free rate of return.
Krepps Corporation produces a single product. Last year, Krepps manufactured 26,030 units and sold 20,700 units. Production costs for the year were as follows: Direct materials$192,622?Direct labor$143,165?Variable manufacturing overhead$210,843?Fixed manufacturing overhead$494,570?Sales totaled $983,250 for the year, variable selling and administrative expenses totaled $120,060, and fixed selling and administrative expenses totaled $161,386. There was no beginning inventory. Assume that direct labor is a variable cost.Under absorption costing, the ending inventory for the year would be valued at:
A. $283,200 B. $213,200 C. $274,700 D. $240,700