Photo Finish Corporation Bought a 40% Interest in the Voting

question 38

Multiple Choice

Photo Finish Corporation bought a 40% interest in the voting stock of Click It Corporation's $1 par value common stock for $20 million (2 million shares at a $10 market price) on March 31,2011.On December 31,2011,Click It paid a $1 million cash dividend declared earlier in 2011 and reported net income for the year ended 2011 of $10 million.On December 31,2011,Click It's stock was trading at $11.50 per share. What effect will the dividend have on Photo Finish's financial statements?

• A)It would increase cash and increase investment income.
• B)It would increase cash and decrease investment in Click It.
• C)It would increase cash and increase net unrealized gains/losses.
• D)It would increase cash and increase the allowance to value at market account.

---

Definitions:

Compulsive Disorder

A mental disorder where individuals feel the need to perform certain routines repeatedly or have certain thoughts repeatedly.

Response To Intervention

An educational strategy aimed at early detection and support for students with learning and behavior needs through a tiered approach.

Educational Strategy

A plan of action designed to achieve specific learning outcomes or educational goals.

Hygiene Hypothesis

A theory suggesting that a lack of early childhood exposure to infectious agents, symbiotic microorganisms, and parasites increases susceptibility to allergic diseases.