Use the Following Information to Answer the Question(s) Below -If SOS Sold the Additional Shares Directly to Great,Great's Investment

question 25

Multiple Choice

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

Great Corporation acquired a 90% interest in SOS Corporation at its $810,000 book value on December 31, 2013. A summary of the stockholders' equity for SOS at the end of 2013 and 2014 is as follows:

$$\begin{array} { l l l } & \underline { 12 / 31 / 13 } & \underline { 12 / 31 / 14 } \\\text { Capital stock, } \$ 10 \text { par } & \$ 600,000 & \$ 500,000 \\\text { Additional paid-in capital }& 30,000 & 30,000 \\\text { Retained Earnings } & \underline { 270,000 } & \underline { 420,000 } \\\text { Total stockholders' equity }&\underline { \$900,000}&\underline { \$1,050.000}\end{array}$$
-If SOS sold the additional shares directly to Great,Great's Investment in SOS account after the sale would be

• A)$1,350,000.
• B)$1,395,000.
• C)$1,425,000.
• D)$1,500,000.

---

Definitions:

Labor Hours

The total number of work hours contributed by employees for productive activities over a specified period.

Inventory Holding Cost

The total cost associated with keeping inventory in stock, including storage, insurance, taxes, depreciation, and opportunity costs.

Forward Buying

A procurement strategy where a company purchases goods in advance to take advantage of favorable pricing or to hedge against future price increases and supply shortages.

Peak Period

Peak period denotes the time of highest demand in a cycle, where operations face maximum stress due to increased consumer activity.