Rock Company Acquired 40% of the Voting Stock of Hudson

question 66

Multiple Choice

Rock Company acquired 40% of the voting stock of Hudson Company for $40 million.In year 1, Hudson Company reports net income of $15 million and pays cash dividends of $5 million.At the end of the year the market value of Rock Company's investment in Hudson Company is $44 million.The _____ method should be used to account for the investment.

• A)market
• B)equity
• C)consolidated
• D)cost

---

Definitions:

Average Emotions

The typical or mean level of emotional responses or feelings experienced by an individual or group over a period.

Thematic Apperception Test

A projective psychological test where subjects interpret ambiguous images, used to explore their emotions, thoughts, and conflicts.

High Need for Achievement

A psychological trait characterized by a strong desire to accomplish tasks and achieve high standards.

Desire to Succeed

A strong motivation or drive to achieve goals and excel in various endeavors.