If Watkins Pays $450,000 in Cash for Glen, and Glen

question 2

Multiple Choice

If Watkins pays $450,000 in cash for Glen, and Glen earns $50,000 in net income and pays $20,000 in dividends during 2017, what amount representing Glen would be reflected in consolidated net income for the year ended December 31, 2017?

• A) $20,000 under the initial value method.
• B) $30,000 under the partial equity method.
• C) $50,000 under the partial equity method.
• D) $44,500 under the equity method.
• E) $45,500 regardless of the internal accounting method used.

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Definitions:

Interval Data

A type of numerical data that represents quantities and for which intervals between values are meaningful, allowing for a range of mathematical operations.

Scatter Diagram

A graph used to visually display and assess the relationship between two variables by plotting data points.

Scatter Diagram

A graphical representation of data points for two variables to determine if there is a relationship between them.

Scatter Diagram

A graphical representation of the relationship between two variables, using dots to show each observation in the dataset.