Partridge Purchased a 60% Interest in Sparrow on January 1

question 39

Multiple Choice

Partridge purchased a 60% interest in Sparrow on January 1, 20X1, for $240,000. At the time of the purchase, Sparrow had the following stockholders' equity: Any excess is attributable to goodwill. On January 1, 20X6, the retained earnings of Sparrow was $175,000. The entire investment was sold for $300,000 on January 1, 20X6. At that date, Partridge had on hand inventory it had purchased from Sparrow for $50,000. Sparrow has a gross profit percentage of 40%. The gain (loss) was ____.

• A)$105,000
• B)$81,000
• C)$27,000
• D)$39,000

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Definitions:

Autonomic Nervous System

The autonomic nervous system is a part of the nervous system responsible for controlling involuntary bodily functions, such as heart rate, digestion, and breathing.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood glucose; plays roles in metabolism and immune response.

Anger

A strong feeling of annoyance, displeasure, or hostility, often a response to perceived wrongs or frustrations.

Emotional Expression

the verbal and nonverbal communication of feelings, including facial expressions, body language, and verbalizations.