The Following Information Applies to Questions 29-31

question 13

Multiple Choice

The following information applies to Questions 29-31
On January 1, 20X6, Climber Corporation acquired 90 percent of Wisden Corporation for $180,000 cash. Wisden reported net income of $30,000 and dividends of $10,000 for 20X6, 20X7, and 20X8. On January 1, 20X6, Wisden reported common stock outstanding of $100,000 and retained earnings of $60,000, and the fair value of the noncontrolling interest was $20,000. It held land with a book value of $30,000 and a market value of $35,000 and equipment with a book value of $50,000 and a market value of $60,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of five years. All depreciable assets held by Wisden at the date of acquisition had a remaining economic life of five years. Climber uses the equity method in accounting for its investment in Wisden.
-Based on the preceding information,what balance would Climber report as its investment in Wisden at January 1,20X8?

• A) $230,400
• B) $180,000
• C) $234,000
• D) $203,400

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Definitions:

Biceps Femoris

A muscle of the posterior thigh compartment, important in knee flexion and thigh extension, part of the hamstrings group.

Linea Alba

A fibrous structure that runs down the midline of the abdomen, forming the seam of the abdominal muscles, and serves as an important site for muscle attachment.

Rectus Abdominis

A major muscle in the abdomen, known as the "six pack," responsible for flexing the lumbar spine and stabilizing the pelvic and lower back region.

External Oblique

A muscle located on the lateral and anterior parts of the abdomen, involved in trunk rotation and lateral flexion of the spine.