REFERENCE: Ref.01_15 Cayman Inc.bought 30% of Maya Company on January 1,2008 for 1,2008

question 10

Multiple Choice

REFERENCE: Ref.01_15
Cayman Inc.bought 30% of Maya Company on January 1,2008 for $450,000.The equity method of accounting was used.The book value and fair value of the net assets of Maya on that date were $1,500,000.Maya began supplying inventory to Cayman as follows:
Maya reported net income of $100,000 in 2008 and $120,000 in 2009 while paying $40,000 in dividends each year.
-What is the amount of unrealized inventory gain to be deferred on December 31,2009?

• A)$1,500.
• B)$2,400.
• C)$3,600.
• D)$4,000.
• E)$8,000.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability in a set of data, often used in finance to quantify the risk associated with a security or investment portfolio.

Coefficient Of Variation

A standardized measure of the dispersion of a probability distribution or frequency distribution, used to assess risk relative to expected returns.

Beta

Beta is a measure of a stock's volatility in relation to the overall market, indicating its risk relative to the market average.

Required Return

The smallest annual return percentage required to motivate persons or firms to allocate funds into a certain security or initiative.