On January 1, 2018, a subsidiary buys 8 percent of the outstanding voting stock of its parent corporation. The payment of $350,000 exceeded book value of the acquired shares by $50,000, attributable to a copyright with a 10-year useful life. During the year, the parent reported operating income of $675,000 (excluding investment income from the subsidiary), and paid $100,000 in dividends. If the treasury stock approach is used, how is the Investment in Parent Stock reported in the consolidated balance sheet at December 31, 2018?
A. Consolidated stockholders' equity is reduced by $300,000.
B. There is no effect on the consolidated balance sheet, because the effects have been eliminated.
C. Included in current assets.
D. Included in noncurrent assets.
E. Consolidated stockholders' equity is reduced by $350,000.
Answer: E
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On January 5, 2009, Garrett Company, a calendar-year company, issued $500,000 of notes payable, of which $100,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2009, is
A) Current Liabilities, $500,000. B) Current Liabilities, $100,000; Long-term Debt, $400,000. C) Long-term Debt, $500,000 D) Current Liabilities, $400,000; Long-term Debt, $100,000.
A small stock dividend is generally one that is less than ________
a. 90% b. 50% c. 40% d. 25%
Describe the various levels of participation in the normative decision model.
What will be an ideal response?
During analysis in simulation methodology, the decision maker can perform:
a. Descriptive statistics such as points and estimates. b. Hypothesis testing. c. Risk analysis. d. All of the above