High Traffic Products Corporation Has Two Departments,Small and Large

question 39

Multiple Choice

High Traffic Products Corporation has two departments,Small and Large.Central costs could be allocated to the two departments in various ways.

If total rent expense of $71,550 is allocated on the basis of square footage,the amount allocated to the Small Department would be ________.(Do not round interim calculations.Round the final answer to the nearest whole dollar. )

• A)$51,900
• B)$19,650
• C)$35,775
• D)$27,090

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Definitions:

Investment in Associates

A long-term investment in another company where the investor holds a significant but not majority stake, typically 20%-50% of the voting stock.

Equity Method

An accounting technique used to record investments in associate companies, where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor's share of net assets of the investee.

Equity Method

An accounting technique used to record investments in associate companies, whereby an investor adjusts the carrying amount of the investment to recognize its share of the earnings or losses of the associate.

Investment Account

An account held at a financial institution that is used to buy, hold, and sell investments such as stocks, bonds, and mutual funds.