Pendleton Company Acquired a 70% Interest in Sunflower Company on December

question 6

Multiple Choice

Pendleton Company acquired a 70% interest in Sunflower Company on December 31, 2016, for $380,000. During 2017 Sunflower had a net income of $30,000 and paid a cash dividend of $10,000. Applying the cost method would give a debit balance in the Investment in Stock of Sunflower Company account at the end of 2017 of:

• A) $400,000.
• B) $394,000.
• C) $373,000.
• D) $380,000.

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Definitions:

Organ Reserve

The capacity of organs to function beyond the basal levels necessary to meet daily physiological needs, allowing the body to tolerate and recover from stress or illness.

Homeostasis

The process by which organisms maintain a stable internal environment despite changes in external conditions.