In 2010, Yorkshire Inc

question 62

Multiple Choice

In 2010, Yorkshire Inc., which owns 100% of Blake Company, sold land to Blake Company at $50,000 greater than its cost. The land is still owned by Blake Company. The tax rate is 30%. What is the required consolidated financial statement adjustment in 2013?

• A)Decrease Beginning Retained Earnings: $35,000, decrease Land: $35,000.
• B)Decrease Beginning Retained Earnings: $35,000, decrease Land: $50,000, and increase Deferred Tax Asset: $15,000.
• C)Decrease Beginning Retained Earnings: $50,000, decrease Land: $35,000, and decrease Deferred Tax Asset: $15,000.
• D)Decrease Beginning Retained Earnings: $50,000, decrease Land: $50,000.

Understand the conditions under which a person can claim ownership or possession of property.

Recognize the legalities involved in conditional gifts and their revocability.

Grasp the concept of liability in situations of negligence related to personal property.

Identify the legal procedures and outcomes for property shared or owned as tenants in common.

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Definitions:

Cost Object(s)

Any item, activity, or project for which separate measurement of costs is desired, facilitating targeted expense management and financial efficiency.

Indirect Labor

This term describes labor costs not directly associated with the production of goods or services, such as maintenance and supervisory personnel.

Factory Utilities

Expenses associated with the utilities consumed in a factory, such as electricity, gas, and water, used during the manufacturing process.

Overhead Allocation Base

A measure or criterion used to distribute overhead costs among various products, services, or departments.