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.

Illustrate the impact of early experiences on trust and attachment in infants.

Describe the relationship between attachment styles and later social competence.

Understand the stages and characteristics of adolescent development.

Comprehend the Physical changes that occur during puberty.

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Definitions:

Financial Distress Costs

Expenses that a company faces when it is having difficulty meeting its financial obligations, which can include legal, restructuring, and operational costs.

Debt-equity Ratio

The ratio highlighting the financial mix of equity and debt used in the acquisition of company assets.

Break-even Level

The juncture where overall expenses match the total income, leading to neither a net profit nor a loss.

M&M Theory

Modigliani and Miller's theory positing that in an ideal market, a company's value is unaffected by how it is financed, whether through debt or equity.