JDR Company Purchased 40% of the Common Stock of YRK

question 66

Multiple Choice

JDR Company purchased 40% of the common stock of YRK Corporation on January 1,2019,for $2,000,000 as a long-term investment.The records of YRK Corporation showed the following on December 31,2019: At what amount should JDR report the YRK investment on the December 31,2019 balance sheet?

• A)$2,116,000.
• B)$2,000,000.
• C)$2,096,000.
• D)$2,108,000.

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Definitions:

Profits

The financial benefit attained when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Moving Average Model

A statistical method used in forecasting that calculates the average of a series of data points over specific intervals to smooth out short-term fluctuations.

Seasonal Indices

Factors used to adjust data to compensate for predictable fluctuations that occur regularly within a specific period, such as monthly or quarterly.

MAD

Acronym for Mutual Assured Destruction, a doctrine of military strategy and national security policy which posits that a full-scale use of nuclear weapons by two or more opposing sides would cause the complete annihilation of both the attacker and the defender.