FTX Company Owns 10% Interest in the Stock of Zip

question 200

Multiple Choice

FTX Company owns 10% interest in the stock of Zip Corporation. During the year, Zip pays $5,000 in dividends to FTX, and reports a net loss of $100,000. FTX Company's investment in Zip will affect FTX net income by a

• A) $5,000 increase.
• B) $10,000 increase.
• C) $10,000 decrease.
• D) $5,000 decrease.

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Definitions:

Social Facilitation

The tendency for individuals to perform differently when in the presence of others than when alone, typically improving performance on simple or well-practiced tasks.

Social Loafing

The tendency of individuals to exert less effort when working in a group than when working alone.

Social Norm

Unwritten rules or expectations for behavior in a given society or group that guide and constrain individual behavior, promoting social order and cohesion.

Drink Coffee

The act of consuming a beverage made by brewing roasted and ground beans from the Coffea plant.