Cooper Ltd

question 34

Multiple Choice

Cooper Ltd.acquired 70% of the common shares of Effy Ltd.at January 2,20X1.At December 31,20X3,Effy sold a machine to Cooper for $180,000.Effy had purchased the machine a few years ago for $250,000.At the time of sale to Cooper,the machine had a carrying value of $150,000 and a remaining useful life of 6 years.Both companies do not claim amortization for assets purchased in the second half of the year.For Cooper's December 31,20X3 single-entry financial statements,what net book value should be shown for the machine?

• A)$125,000
• B)$150,000
• C)$180,000
• D)$250,000

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Definitions:

Catalytic Converters

Devices incorporated in the exhaust system of vehicles that reduce harmful emissions by converting pollutants into less harmful substances.

Internalization of Externalities

Refers to actions taken to incorporate the external costs or benefits of a good or service into the price paid by the consumers or producers.

Sewage-Treatment Plant

A facility designed to receive the wastewater from domestic, commercial, and industrial sources and to remove materials that damage water quality and threaten public health and safety.

Environmental Standard

Rules and criteria set by governmental bodies to protect the environment by controlling pollution levels and resource use.