Petunia Corporation acquired 90 percent of the stock of Spring Company on January 1, 20X2, for $360,000. At that date, the fair value of the noncontrolling interest was $40,000. Spring's balance sheet contained the following amounts at the time of the combination: Cash$20,000 Accounts Payable$25,000 Accounts Receivable 60,000 Bonds Payable 75,000 Inventory 70,000 Common Stock 100,000 Buildings and Equipment (net) 350,000 Retained Earnings 300,000 Total Assets$500,000 Total Liabilities & Equity$500,000 During each of the next three years, Spring reported net income of $70,000 and paid dividends of $20,000. On January 1, 20X4, Petunia sold 3,000 shares of Spring's $5 par value shares for $90,000 in cash. Petunia used the fully adjusted equity method in
accounting for its ownership of Spring Company.Based on the preceding information, in the journal entry recorded by Petunia for the sale of shares
A. Investment in Spring Stock will be credited for $90,000.
B. Investment in Spring Stock will be credited for $75,000.
C. Additional Paid-in Capital will be credited for $9,000.
D. Cash will be credited for $90,000.
Answer: B
You might also like to view...
A job shop is an example of a(n):
A) repetitive process. B) continuous process. C) line process. D) intermittent process. E) specialized process.
Which of the following statements is CORRECT?
A. The MIRR and NPV decision criteria can never conflict. B. The IRR method can never be subject to the multiple IRR problem, while the MIRR method can be. C. One reason some people prefer the MIRR to the regular IRR is that the MIRR is based on a generally more reasonable reinvestment rate assumption. D. The higher the WACC, the shorter the discounted payback period. E. The MIRR method assumes that cash flows are reinvested at the crossover rate.
Which of the following is not an example of a start-up digital news site?
A) Huffington Post B) Buzzfeed C) Vice D) USA Today
The inference engine, also known as the control structure or the rule interpreter (in rule-based ES), is essentially a computer program that provides a methodology for reasoning about information in the knowledge base and on the blackboard to
formulate appropriate conclusions. Indicate whether the statement is true or false