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

question 42

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 balance in investment in Spiel on December 31,20X8,if it used the fair value option to account for its investment in Spiel?

• A) $105,000
• B) $118,750
• C) $100,000
• D) $122,500

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Definitions:

Drag

The resistance force encountered by an object moving through a fluid or by a fluid moving around an object.

Cope

To shape or modify the end of a beam or structural element to fit the contours of another, or to allow it to rest securely on a connection.

ASME

The American Society of Mechanical Engineers, an organization that sets standards and codes for engineering practices, including dimensions, tolerances, and technical specifications.

American Society

A generalized term that might refer to various official societies or associations based in the United States.