Vaughn Inc

question 21

Multiple Choice

Vaughn Inc. acquired all of the outstanding common stock of Roberts Co. on January 1, 2020, for $276,000. Annual amortization of $21,000 resulted from this acquisition. Vaughn reported net income of $80,000 in 2020 and $60,000 in 2021 and paid $24,000 in dividends each year. Roberts reported net income of $50,000 in 2020 and $57,000 in 2021 and paid $12,000 in dividends each year. What is the Investment in Roberts Co. balance on Vaughn's books as of December 31, 2021, if the equity method has been applied?

• A) $317,000.
• B) $326,000.
• C) $341,000.
• D) $368,000.
• E) $383,000.

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Definitions:

Power Base

The source from which an individual or entity derives their ability to influence others, which can include factors like knowledge, relationships, or official position.

Empowered Managers

Managers who are given the authority, means, and ability to make decisions and implement changes within their areas of responsibility.

Subordinates

Individuals who work under the direction of someone else in an organization, often tasked with less senior positions.

Effective Leaders

Individuals who can inspire and guide others towards achieving goals through their competence, vision, empathy, and strategic decision-making.