Use the Following Information for Questions

question 37

Multiple Choice

Use the following information for questions.
The summarized balance sheets of Thunder Bay Corp.and Fort William Corp.at December 31, 2017 are as follows:
-If Thunder Bay acquired a 30% interest in Fort William on December 31, 2017 for $75,000 and the equity method of accounting for the investment were used, the amount of the debit to Investment in Fort William Corp.would have been

• A)$90,000.
• B)$75,000.
• C)$67,500.
• D)$60,000.

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Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Secondary Markets

Markets where securities are bought and sold after their initial issuance, allowing for liquidity and valuation of financial instruments.

Working Capital Financing Policy

Strategies a company uses to manage and finance its current assets and current liabilities to ensure it has sufficient liquidity to run its operations.

Net Working Capital

Current assets minus current liabilities.