Partridge Purchased a 60% Interest in Sparrow on January 1

question 19

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 equipment with a 10-year life. On January 1, 20X6, the retained earnings of Sparrow was $175,000. During the first 6 months of 20X6, $25,000 was earned by Sparrow. The entire investment was sold for $300,000 on July 1, 20X6. The gain (loss) was ____.

• A)$87,000
• B)$78,000
• C)$12,000
• D)$60,000

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Definitions:

People Speaking

Involves the communication or dialogue between individuals, highlighting the verbal exchange of ideas and information.

Voices

The sounds produced by humans and animals using their vocal cords, especially when speaking or singing.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or touched, which develops in infants around the age of 8 to 12 months.

Representational Abilities

The cognitive ability to use symbols, language, and pictures to represent and understand the world.