How Much Is the Adjustment to the Investment in Stanley

question 20

Multiple Choice

How much is the adjustment to the Investment in Stanley Corporation for the change from the fair-value method to the equity method on January 1, 2018?

• A) A debit of $16,500.
• B) A debit of $21,500.
• C) A debit of $90,000.
• D) A debit of $165,000.
• E) There is no adjustment.

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Definitions:

Government Raise

An increase in government revenue, often achieved through raising taxes or adjusting fiscal policies, to support government spending.

Tax

A compulsory financial charge imposed by a governmental organization in order to fund various public expenditures.

Per Capita Consumption

The average consumption of goods and services per person within a particular population.

Cigarette Tax

A tax imposed by governments on the sale of cigarettes to raise revenue and discourage smoking by increasing the price.