Please Refer to the Following Information for Peartree Company

question 53

Multiple Choice

Please refer to the following information for Peartree Company: If Peartree resold 1,000 shares of treasury stock for $24 per share, what journal entry would be required?

• A)Debit Treasury stock $24,000 and credit Cash $24,000.
• B)Debit Treasury stock $20,000, debit Paid-in capital $2,000 and credit Cash $24,000.
• C)Debit Cash $24,000 and credit Treasury stock $24,000.
• D)Debit Cash $24,000, credit Treasury stock $20,000 and credit Paid-in capital $4,000.

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Definitions:

Effective Tax Rate

The average percentage of net income that a person or corporation pays in taxes, effectively showing the portion of income gone to taxes.

Non-Controlling Interest

A minority share of ownership in a subsidiary that is not directly controlled by the parent company, typically reflected in the equity section of the consolidated financial statement.

Consolidated Financial Position

A representation of a parent company and its subsidiaries' financial status as one entity, summarizing assets, liabilities, and equity.

Acquisition Differential

The difference between the purchase price of a company and the fair value of its identifiable net assets at the acquisition date.