Robert Company Acquired 40% of the Voting Stock of Boulder

question 2

Multiple Choice

Robert Company acquired 40% of the voting stock of Boulder Company for $40 million.At the end of Year 1,Boulder Company reports net income of $15 million and pays cash dividends of $5 million.At the end of Year 1,the market value of Robert Company's investment in Boulder Company is $44 million.What accounts on Robert Company's books would be affected by the net income of Boulder Company?

• A) none
• B) Investments increase $15 million and Investment Revenue increases $15 million
• C) Cash increases $15 million and Investment Revenue increases $15 million
• D) Investments increase $6 million and Investment Revenue increases $6 million

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Definitions:

Mission

A statement that defines the purpose, goals, and values of an organization, guiding its strategies, decisions, and operations.

Business

The clear, broad, underlying industry or market sector of an organization’s offering.

Performance Targets

Specific goals set for individuals or teams to achieve within a set timeframe, often used as a measure of productivity or quality in the workplace.

Visions

Describes a company's future aspirations or long-term goals, providing a framework for strategic planning and decision-making.