On January 1, 2013, Riney Co The Balance in Riney's Investment in Garvin Co

question 104

Multiple Choice

On January 1, 2013, Riney Co. owned 80% of the common stock of Garvin Co. On that date, Garvin's stockholders' equity accounts had the following balances: $\begin{array}{lr}\text { Common stock ( } \$ 5 \text { par value) } & \$ 250,000 \\\text { Additional paid-in capital } & 110,000 \\\text { Retained earnings } & 330,000 \\\text { Total stockholders' equity } & \$ 690,000 \\\end{array}$ The balance in Riney's Investment in Garvin Co. account was $552,000, and the non-controlling interest was $138,000. On January 1, 2013, Garvin Co. sold 10,000 shares of previously unissued common stock for $15 per share. Riney did not acquire any of these shares. What is the balance in Investment in Garvin Co. after the sale of the 10,000 shares of common stock?

• A)$552,000.
• B)$560,000.
• C)$460,000.
• D)$404,000.
• E)$672,000.

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Definitions:

Tradeoff

A situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Responsiveness

The quality of reacting quickly and positively to changes, inquiries, or requests.

Collective Bargaining Agreements

Legal contracts between employers and workers' unions outlining wages, hours, benefits, and working conditions.

Rank and File Approval

The process by which ordinary members of an organization, particularly a union, endorse decisions or policies, typically through voting.