Use the Following Information to Answer the Question(s) Below

question 8

Multiple Choice

Use the following information to answer the question(s) below.

On December 31, 2013, Parminter Corporation owns an 80% interest in the common stock of Sanchez Corporation and an 80% interest in Sanchez's preferred stock. On December 31, 2013, Sanchez's stockholders' equity was as follows:
On December 31, 2013, preferred dividends are not in arrears. Sanchez had 2014 net income of $30,000 and only preferred dividends are declared and paid in 2014. There are no book value/fair value differentials associated with Parminter's investments.


-How much should the Parminter's Investment in Sanchez-Common Stock,change during 2014?

• A)$5,000
• B)$20,000
• C)$25,000
• D)$30,000

---

Definitions:

State Law

Legislation that is enacted and enforced by individual states within the United States.

Market Share

Market share represents the portion of an industry's sales that is controlled by a particular company, indicating its competitiveness.

Infringes

To violate, as in breaking the terms of a law or a right.

Registered Trademark

A trademark that has been officially recognized and recorded by a governmental entity, granting exclusive rights to the owner for its use in commerce.