Phelps Co Uses the Sophisticated Equity Method to Account for the the 80

question 2

Multiple Choice

Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values. Based upon the following information, what amount does Phelps Co. record as subsidiary income?

• A)$50,000
• B)$44,000
• C)$40,000
• D)$36,000

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Definitions:

Express Emotion

The act of conveying feelings or emotions through words, facial expressions, gestures, or other forms of communication.

Primary Medium

The main method or channel through which information or content is delivered, such as print, digital, or broadcast media.

Location-Based Social Networking

Social media platforms that use geographical data to connect users, suggest activities, or provide content relevant to their current location.

Business Communication

The exchange of information among individuals both inside and outside an organization, conducted for the organization's commercial advantage.