The Following Information Applies to Questions 21-26

question 25

Multiple Choice

The following information applies to Questions 21-26
On December 31, 20X8, X Company acquired controlling ownership of Y Company. A consolidated balance sheet was prepared immediately. Partial balance sheet data for the two companies and the consolidated entity at that date follow:
During 20X8, X Company provided consulting services to Y Company and has not yet paid for them. There were no other receivables or payables between the companies at December 31, 20X8.

-Based on the information given,what is the amount of unpaid consulting services at December 31,20X8,on work done by X Company for Y Company?

• A) $0
• B) $10,000
• C) $5,000
• D) $15,000

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Definitions:

Lending

The act of giving money, property, or other material goods to another party with the expectation of future repayment of the principal amount along with interest or other finance charges.

Public Outlay

The total amount of government spending, including expenditures on public services, infrastructure, and welfare programs.

Printing Money

The process by which the central bank increases the money supply by physically creating more currency.

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the supply of money and credit in the economy.