On January 3, 2019, Sheppard Corporation Purchased 25% of Meredith

question 91

Multiple Choice

On January 3, 2019, Sheppard Corporation purchased 25% of Meredith Corporation's common stock for $64,000. The net asset's book value is equal to the fair market value. Meredith's net income for the years ended December 31, 2019 and 2020 were $18,000 and $56,000 respectively. Meredith declared no dividends during 2019; however, during 2020, the company declared a $70,000 dividend. On December 31, 2019, the fair value of Meredith's stock that Sheppard Corporation owned had increased to $71,000; in 2020, it increased again to $76,000. What would be the balance in the investment account as of December 31, 2020?

• A) $64,000
• B) $65,000
• C) $71,000
• D) $76,000

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Definitions:

Symptom Substitution

A theory suggesting that if a symptom is removed without resolving the underlying cause, a new symptom will emerge to take its place.

Problem Reduction

Problem reduction is a strategy in problem-solving processes that involves breaking down a larger, often complex problem into smaller, more manageable parts to address them individually.

Joseph Wolpe

A psychiatrist who significantly contributed to the development of behavioral therapy through techniques like systematic desensitization.

Conditioning

The process of learning associations between environmental stimuli and behavioral responses, often used to explain behavior modification.