When indirect control is present, which of the following statements is true?
A. Consolidated financial statements are required for only one subsidiary.
B. The parent company owns a percent of subsidiary and subsidiary owns a percent of the parent.
C. At least one company within the consolidated entity holds a parent and a subsidiary relationship.
D. Recognition of income for an indirectly owned subsidiary is ignored.
E. Only dividend income is recognized for an indirectly owned subsidiary.
Answer: C
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The future value of held-to-maturity debt securities reflects the economic opportunity cost of continuing to hold the securities
Indicate whether the statement is true or false
Which of the following opinions is a proponent of corporate social responsibility most likely to hold?
a. The primary responsibility of social welfare rests with governments and not business firms. b. The free market, not companies, should decide what is best for the world. c. Businesses have resources, so businesses should be given the chance to solve social problems. d. Businesses never perpetrate social problems.
Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.Demers earns income and pays dividends as follows: 2019 2020 2021Net income$100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 ??Assume the initial value method is applied.?How much does Pell record as Income from Demers for the year ended December 31, 2019?
A. $74,400. B. $32,000. C. $73,000. D. $42,400. E. $41,000.
The Truth-in-Lending Act (TILA) is intended to assure a truthful loan application by the consumer
a. True b. False Indicate whether the statement is true or false