Subsidiary Company Borrowed $75,000 from Parent Company on a Note

question 8

Multiple Choice

Subsidiary Company borrowed $75,000 from Parent Company on a note payable during the year. Before the consolidation entries were made on the worksheet, the balances in Parent Company's Notes Receivable and Notes Payable accounts were $175,000 and $255,000, respectively. A consolidated balance sheet shows:

• A)Notes Receivable of $175,000 and Notes Payable of $330,000.
• B)Notes Receivable of $250,000 and Notes Payable of $255,000.
• C)Notes Receivable of $100,000 and Notes Payable of $255,000.
• D)Notes Receivable of $175,000 and Notes Payable of $180,000.

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Definitions:

Monopolistic Distributor

A distributor who has exclusive control over the supply of a particular product or service in the market, limiting competition.

Marginal Cost

The amount of money needed to produce one more unit of a specific good or service.

Mineral Water

Water that contains various minerals, such as salts and sulfur compounds, often sourced from a well or spring and considered beneficial to health.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers at those prices.