Use the Following Information to Solve the Following Questions:
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question 45

Multiple Choice

Use the following information to solve the following questions:
The summarized balance sheets of Thunder Bay Corp. and Fort William Corp. at December 31, 2020, are as follows:
$\quad$$\quad$$\quad$$\quad$ THUNDER BAY CORP.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Balance Sheet
$\quad$$\quad$$\quad$$\quad$$\quad$ December 31, 2020
$\begin{array}{llcc} \text {Assets. } &\underline{\$400,000} \\ \text {Liabilities. } &\$50,000\\ \text { Common shares } &200,000\\ \text { Retained earnings } &\underline{150,000}\\ \text { Total equities } &\underline{\$400,000}\\\end{array}$


$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ FORT WILLIAM CORP.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Balance Sheet
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ December 31, 2020
$\begin{array}{llcc} \text { Assets } & \underline{\$300,000} \\\end{array}$

$\begin{array}{c}\text {FORT WILLIAM CORP.}\\\text {Balance Sheet}\\\text {December 31,2020}\\\begin{array}{lll} \text { Assets.}\\ \text { Liabilities}\\ \text { Common shares.}\\ \text { Retained earnings.}\\ \text { Total equities.}\end{array}\begin{array}{l}\underline{\$ 300,000}\\\$ 75,000 \\185,000 \\\underline{40,000} \\\underline{\$ 300,000 }\\\end{array}\end{array}$

-If Thunder Bay acquired a 30% interest in Fort William on December 31, 2020, for $ 67,500 and during 2021 Fort William reported net income of $ 25,000 and paid a total cash dividend of $ 30,000, applying the equity method would give a debit balance in the Investment in Fort William Corp. account at the end of 2021 of

• A) $ 67,500.
• B) $ 66,000.
• C) $ 62,500.
• D) $ 58,500.

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Definitions:

Relays

Electrically operated switches used to control circuits.

Fretting

Wear at the contact surfaces of two materials that occurs from repeated cyclical motion or vibration, often seen in electrical connections.

Thermal Cycling

A pattern of heating and cooling that, over time, can cause resistance to build up in electrical connections.

Amps

A unit of electric current, short for amperes, indicating the amount of electrical charge passing a point per second.