Pure Life Corporation Has Just Finished Preparing a Consolidated Balance

question 50

Multiple Choice

Pure Life Corporation has just finished preparing a consolidated balance sheet,income statement,and statement of changes in retained earnings for 20X9.The following items are proposed for inclusion in the consolidated cash flow statement:
Pure Life holds 75 percent of the voting stock of Shane Pharmaceuticals,acquired at book value on June 21,20X6.On the date of the acquisition,the fair value of the noncontrolling interest was equal to 25 percent of the book value of Shane.
-Based on the preceding information,what amount will be reported in the consolidated cash flow statement as net cash used in financing activities for 20X9?

• A)$40,000
• B)$55,000
• C)$90,000
• D)$10,000

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Definitions:

Variable Expenses

Costs that vary in total in direct proportion to changes in an activity level or volume, such as materials and labor costs.

Fixed Expenses

Expenses that remain constant regardless of the amount of goods produced or sold, including items like rent, salaries, and insurance costs.

Unit Sales

The measurement of the number of individual items or units sold by a company.

Monthly Target Profit

The specific amount of profit a company aims to achieve within a month.