On the Consolidated Financial Statements for 2017, What Amount Should

question 45

Multiple Choice

On the consolidated financial statements for 2017, what amount should have been shown for Equity in Subsidiary Earnings?

• A) $432,000.
• B) $ -0-
• C) $408,000.
• D) $120,000.
• E) $288,000.

Knowledge of asset classification (Current, Fixed, Long-term, Property Plant and Equipment).

Appreciate the importance of accurately determining the cost to be added to an asset account following a purchase agreement.

Understand the importance and treatment of salvage value and useful life in depreciation calculations.

Grasp the financial statement implications of using different depreciation methods and errors in depreciation calculations.

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Definitions:

Maturing Debt

Debt that is due for repayment within the next fiscal year or operating cycle, whichever is longer.

Earnings per Share

A financial metric that calculates the portion of a company’s profit allocated to each outstanding share of common stock, indicating company profitability.

Dividend Yield

The ratio of a company's annual dividend payments to its share price, indicating the earnings from investment in stocks as a percentage.

Acid-test Ratio

A liquidity measurement that evaluates whether a company can pay its short-term obligations using its most liquid assets, typically excluding inventory.