On January 1, 20X7, Yang Corporation Acquired 25 Percent of the Outstanding

question 11

Multiple Choice

On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Yang was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively.
-Based on the preceding information,what amount will be reported by Yang as income from its investment in Spiel for 20X8,if it used the equity method of accounting?

• A) $7,500
• B) $11,250
• C) $18,750
• D) $26,250

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Definitions:

Elimination Of Prejudice

The process of removing biases or preconceived notions against people or groups.

Ingroup Favoritism

The tendency to favor members of one's own group over those in other groups in terms of trust, liking, and resource allocation.

Stereotyping

The act of assigning generalized attributes to an individual or group based on perceived membership in a certain category or social group.

Stigma By Association

The prejudice and discrimination that individuals experience as a result of being closely connected to a stigmatized person or group.