Racer Corp

question 14

Multiple Choice

Racer Corp.acquired all of the common stock of Tangiers Co.in 2016.Tangiers maintained its incorporation.Which of Racer's account balances would vary between the equity method and the initial value method?

• A) Goodwill, Investment in Tangiers Co., and Retained Earnings.
• B) Expenses, Investment in Tangiers Co., and Equity in Subsidiary Earnings.
• C) Investment in Tangiers Co., Equity in Subsidiary Earnings, and Retained Earnings.
• D) Common Stock, Goodwill, and Investment in Tangiers Co.
• E) Expenses, Goodwill, and Investment in Tangiers Co.

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Definitions:

Punishment

The imposition of a penalty as retribution for an offense or undesirable behavior.

Reinforcement

A process in psychology and behavior analysis that strengthens a behavior or response due to the application of a stimulus (reward or punishment) after the behavior occurs.

Unpleasant Consequence

An undesirable result or effect that follows a particular action or decision.

Law of Immediate Reinforcement

A principle stating that behaviors are more likely to be repeated when they are immediately followed by a positive reinforcement.