P Company Bought 60% of the Common Stock of S $\begin{array}{lrr} & 2014 & 2015 \\\text { P Company } & \$ 280,000 & \$ 210,000 \\\text { S Company } & 70,000 & 105,000\end{array}$

question 36

Essay

P Company bought 60% of the common stock of S Company on January 1, 2014.On January 1, 2014 there was an intercompany sale of equipment at a gain of $63,000.The equipment had an estimated remaining life of six years.Net incomes of the two companies from their own operations (including sales to affiliates) were as follows: $\begin{array}{lrr} & 2014 & 2015 \\\text { P Company } & \$ 280,000 & \$ 210,000 \\\text { S Company } & 70,000 & 105,000\end{array}$

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Definitions:

Secondary Reinforcement

A process in conditioning where a stimulus reinforces a behavior after it has been associated with a primary reinforcer.

Variable Ratio Schedule

A reinforcement schedule used in conditioning where a response is reinforced after an unpredictable number of responses, leading to high and steady response rates.

Fixed Ratio Schedule

A type of reinforcement schedule in behavioral psychology where a response is reinforced only after a specified number of responses.

Variable Interval Schedule

A reward system where a response is given a reward after a random duration of time.