The Consolidated Balance Sheet of Pasker Corporation and Shishobee Farm

question 3

Essay

The consolidated balance sheet of Pasker Corporation and Shishobee Farm, its 80% owned subsidiary, as of December 31, 2011, contains the following accounts and balances:
Pasker Corporation acquired its interest in Shishobee Farm on January 1, 2011, when Shishobee Farm had $450,000 of Capital Stock and $210,000 of Retained Earnings.Shishobee Farm's net assets had fair values equal to their book values when Pasker acquired its interest.No changes have occurred in the amount of outstanding stock since the date of the business combination.Pasker uses the equity method of accounting for its investment.
Required: Determine the following amounts:
1.The balance of Pasker's Capital Stock and Retained Earnings accounts at December 31, 2011.
2.Cost of Pasker's purchase of Shishobee Farm on January 1, 2011.

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Definitions:

α

Alpha (α) is a threshold value used in hypothesis testing to determine the significance level at which the null hypothesis can be rejected.

Effect Size

A numeric evaluation of the size of the effect observed in an experiment.

T-statistic

A type of statistic used in hypothesis testing, derived from the standardized difference between a sample statistic and its hypothesized population value, divided by the standard error.

Perfect Relationship

Refers to a situation where two variables move together in either 100% positive or 100% negative linear correlation, indicating a direct relationship without any variation.