Mandel Corp B) C) D)

question 50

Multiple Choice

Mandel Corp. retired bonds payable with a carrying value of $980,000. What effect does this transaction have on these accounts?

• A) \[\begin{array} { | l | l | l | }
• \hline \text { Total Assets } & \text { Total Liabilities } & \text { Shareholders' Equity } \\
• \hline \text { Decrease by } \$ 980,000 & \text { Increase by } \$ 980,000 & \text { No effect } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | l | }
• \hline \text { Total Assets } & \text { Total Liabilities } & \text { Shareholders' Equity } \\
• \hline \text { Decrease by } \$ 980,000 & \text { Decrease by } \$ 980,00 & \text { No effect } \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | l | }
• \hline \text { Total Assets } & \text { Total Liabilities } & \text { Shareholders' Equity } \\
• \hline \text { Increase by } \$ 980,000 & \text { Decrease by } \$ 980,000 & \text { Increase by } \$ 980,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | l | }
• \hline \text { Total Assets } & \text { Total Liabilities } & \text { Shareholders' Equity } \\
• \hline \text { No effect } & \text { No effect } & \text { Decrease by } \$ 980,000 \\
• \hline
• \end{array}\]

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Definitions:

Common Shares

A type of equity security representing ownership in a corporation, entitling holders to dividends and voting rights, among other rights.

Non-controlling Interest

An interest in a corporation that is not held by the parent company, representing the share of equity owned by minority shareholders in the subsidiaries of a consolidated group.

Gross Profit

A company's revenue minus its cost of goods sold, reflecting the initial profit figure before deducting operating expenses, interest, and taxes.

Non-controlling Interest

A share in a subsidiary company not owned by the parent company, indicating the portion of equity interest that is not directly controlled by the parent company.