Jax Company Used the Acquisition Method When It Acquired Its

question 15

Multiple Choice

Jax Company used the acquisition method when it acquired its investment in Saxton Company. Jax now sells some of its shares of Saxton such that neither control nor significant influence exists. Which of the following statements is true?

• A) The difference between selling price and acquisition value is recorded as a realized gain or loss.
• B) The difference between selling price and acquisition value is recorded as an unrealized gain or loss.
• C) The difference between selling price and carrying value is recorded as a realized gain or loss.
• D) The difference between selling price and carrying value is recorded as an unrealized gain or loss.
• E) The difference between selling price and carrying value is recorded as an adjustment to retained earnings.

---

Definitions:

Staffing Theory

A framework for making decisions about the recruitment, selection, development, and retention of an organization’s workforce.

Overstaffed Groups

Groups having more members than are necessary for efficient functioning, potentially leading to reduced effectiveness or productivity.

Understaffed Groups

Groups or teams that do not have enough members to effectively manage their assigned tasks, leading to strain and inefficiency.

Here And Now

A focus on the present moment, often used in therapeutic contexts to emphasize awareness of current experiences and feelings.