Soren Corporation Is an 80% Owned Subsidiary of Passia Company

question 12

Multiple Choice

Soren Corporation is an 80% owned subsidiary of Passia Company. Soren purchased bonds of Passia Company for $103,000. Passia Company reported the bond liability on the date of purchase at $100,000 less unamortized discount of $5,000. Assuming that the constructive gain or loss is material, the consolidated income statement should report an:

• A) ordinary loss of $8,000.
• B) ordinary gain of $8,000.
• C) extraordinary loss of $8,000 adjusted for income tax effects.
• D) extraordinary gain of $8,000 adjusted for income tax effects.

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Definitions:

Feeling Rules

Norms or guidelines in a society or group about what emotions are appropriate to display in a given situation.

Sociologist Hochschild

Arlie Russell Hochschild, an American sociologist known for her work on emotional labor, time bind, and the commercialization of intimate life.

Facial Expressions

The movements or positions of the muscles beneath the skin of the face, serving as non-verbal communication signals of emotion.