Bird Corporation Has Several Subsidiaries That Are Included in Its

question 25

Multiple Choice

Bird Corporation has several subsidiaries that are included in its consolidated financial statements and several other investments in corporations that are not consolidated. In its year-end trial balance, the following intercompany balances appear. Ostrich Corporation is the unconsolidated company; the rest are consolidated. What amount should Bird report as intercompany receivables on its consolidated balance sheet?

• A) $0
• B) $10,000
• C) $30,000
• D) $63,000

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Definitions:

Personal Liability

the legal responsibility of an individual to satisfy debts or obligations incurred, using personal assets if necessary.

Partnership

A commercial arrangement in which a business is co-managed and operated by at least two people, following conditions and goals outlined in a Partnership Agreement.

Estoppel

A legal principle that prevents someone from arguing something contrary to a previous position or statement that was relied upon by others.

Negligence

The failure to exercise the care that a reasonably prudent person would under similar circumstances, resulting in unintended harm to others.