Frey Ltd Acquired 70% of Sabo Ltd

question 1

Multiple Choice

Frey Ltd. acquired 70% of Sabo Ltd. in 20X4. On January 1, 20X8, Frey acquired another 10% of Sabo's common shares for $250,000.
- Under the parent-company extension method, the balance of the non-controlling interest at December 31, 20X7, was $600,000. What adjustment should be made to the consolidated shareholders' equity to reflect Frey's additional purchase of shares?

• A)$50,000
• B)$66,667
• C)$200,000
• D)$250,000

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External Cost

A cost that a business or economic activity imposes on third parties who are not part of the transaction, such as pollution.

Pollution

The introduction of contaminants into the natural environment that cause adverse changes, affecting air, water, and soil quality.

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Activities aimed at keeping machinery, equipment, or systems in working order and restoring them to proper condition when they malfunction or deteriorate.

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