Manke Company Owns a 90% Interest in Neske Company

question 7

Multiple Choice

Manke Company owns a 90% interest in Neske Company.Neske, in turn, owns a 10% interest in Manke.Neske has 10,000 common stock shares outstanding, and Manke has 20,000 common stock shares outstanding.How many shares would each firm show as outstanding in the consolidated balance sheet, under the treasury stock method?

• A)​Manke, 20,000
• B)​Manke, 20,000; Neske, 1,000
• C)​Manke, 18,000; Neske, 1,000
• D)​Manke, 18,000

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Definitions:

Nominal GDP

The total value, in current market prices, of all the final goods and services generated within a country's borders over a certain time period.

Real GDP

Real GDP, which adjusts for price changes to offer a true measure of an economy's overall size and its growth trajectory.

Base-Year Prices

Prices of goods and services from a specific base year, used to calculate real values and remove the effect of inflation over time.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in a specified period.