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.

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Definitions:

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A psychological disorder manifesting as a constant feeling of sadness or a diminished interest in activities, which severely affects the individual's daily life.

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A country located on the continent of North America, composed of 50 states, a federal district, five major self-governing territories, and various possessions.

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The airborne particles and gases produced when a substance is burned, often resulting in a distinct smell and hazardous health effects.