Partridge & Sparrow Scenario

question 18

Multiple Choice

Partridge & Sparrow scenario:
Partridge purchased a 60% interest in Sparrow on January 1, 20X1, for $240,000. At the time of the purchase, Sparrow had the following stockholders' equity:
Any excess is attributable to equipment with a 10-year life. On January 1, 20X6, the retained earnings of Sparrow was $175,000.
-Refer to Partridge and Sparrow. The entire investment was sold for $300,000 on January 1, 20X6. The gain was ____.

• A) $87,000
• B) $90,000
• C) $27,000
• D) $78,000

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Definitions:

Motivational

Relating to motivation, which concerns the processes that influence one's willingness to engage in particular behaviors.

Emotional

Relating to a person's feelings and their expression, reflecting a complex psychological state involving physiological arousal, outward behaviors, and conscious experience.

Psychoanalytic Approach

A psychological theory and therapy method developed by Freud, focusing on the unconscious mind, childhood experiences, and psychosexual development.

Unconscious Impulses

Desires or drives that reside within the unconscious mind, affecting behavior and thoughts without the individual's aware recognition.