Vaughn Inc

question 21

Multiple Choice

Vaughn Inc. acquired all of the outstanding common stock of Roberts Co. on January 1, 2020, for $276,000. Annual amortization of $21,000 resulted from this acquisition. Vaughn reported net income of $80,000 in 2020 and $60,000 in 2021 and paid $24,000 in dividends each year. Roberts reported net income of $50,000 in 2020 and $57,000 in 2021 and paid $12,000 in dividends each year. What is the Investment in Roberts Co. balance on Vaughn's books as of December 31, 2021, if the equity method has been applied?

• A) $317,000.
• B) $326,000.
• C) $341,000.
• D) $368,000.
• E) $383,000.

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Definitions:

Thalamus

A brain region that acts as a relay station, processing and transmitting information from the sensory organs to the appropriate areas of the brain.

Cerebellar Cortex

The outer layer of the cerebellum, involved in the coordination of voluntary movements and balance.

Arbor Vitae

The tree-like arrangement of white matter in the cerebellum that helps coordinate and regulate muscular activity.

Cerebellar Peduncles

The three pairs of stalk-like structures that connect the cerebellum to the brainstem.