Pepe, Incorporated Acquired 60% of Devin Company on January 1

question 33

Multiple Choice

Pepe, Incorporated acquired 60% of Devin Company on January 1, 2012. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2012 and 2013, respectively. Pepe uses the equity method to account for its investment in Devin.
What is the consolidated gain or loss on equipment for 2012?

• A) $0.
• B) $9,000 gain.
• C) $9,000 loss.
• D) $21,000 gain.
• E) $21,000 loss.

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Definitions:

Structural Conflicts

Arise due to the inherent structures within societies, organizations, or groups that create inequality or competition for resources, often leading to persistent disputes.

Department's Objectives

The specific goals or targets set by a department within an organization, aiming to guide its actions and measure its performance.

Dysfunctional Conflict

An unhealthy, destructive disagreement between two or more people.

Conflict Management

The practice of recognizing and dealing with disputes in a rational, balanced, and effective way, aiming to reach a resolution that benefits all parties involved.