Sun Company Is a 100%-Owned Subsidiary of Peter Company

question 33

Multiple Choice

Sun Company is a 100%-owned subsidiary of Peter Company. On January 1, 20X1, Sun Company has $500,000 of 8% face rate bonds outstanding, with an unamortized discount of $5,000 that is being amortized over a 5 year remaining life to maturity. On that date, Peter Company purchased the bonds for $497,000. The adjustment to the consolidated income of the two companies needed in the consolidation process for 20X2 (the following year) is ____.

• A)$2,800 increase
• B)$400 decrease
• C)$400 increase
• D)$2,800 decrease

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Definitions:

Process Loss

A phenomenon where team performance is hindered due to inefficient collaboration and interaction among its members.

Group Development

The phases or stages that a group goes through as it forms, progresses, and matures in pursuit of its objectives.

Class Assignment

An instructional task given to students by their teacher which is to be completed during a defined period, either in class or as homework.

Group Development

The process through which a group evolves over time, including forming, storming, norming, performing, and adjourning stages.