Use the Information Below to Answer the Following Questions

question 33

Multiple Choice

Use the information below to answer the following questions:
On 1 January 2012, Sky-High Ltd acquired 100 000 shares (30% of the voting interest) in Down Ltd for $600 000 cash. On 30 June 2012, Down Ltd announced its earnings per share for the first 6 months of 2012 at $1.50 per share. On 20 November, Down Ltd paid dividends to shareholders at $0.90 per share. On 31 December 2012, Down Ltd announced its earnings per share for 2012 at $2.80 per share (i.e., $1.30 additional since 30 June) .
-If Sky-High Ltd used the cost basis,what was the balance sheet value of investment in Down Ltd at 31 December 2012?

• A) $510 000
• B) $600 000
• C) $690 000
• D) $880 000.

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Definitions:

Edward Herman

An American economist, media analyst, and co-author of the "Manufacturing Consent," known for his work on media and propaganda.

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The process by which societal norms and practices make disparities in income, wealth, and power seem natural or unavoidable.

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The various forms of media that reach large audiences via broadcasting, publishing, and the Internet, used to disseminate information or entertainment.

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A regulatory entity overseeing broadcasting and telecommunications in Canada to ensure content and services meet Canadian standards.