Pall, Inc, Owns 40% of the Outstanding Stock of Sibil

question 23

Multiple Choice

Pall, Inc, owns 40% of the outstanding stock of Sibil Company. During 2017, Pall received a $4,000 cash dividend from Sibil. What effect did this dividend have on Pall's 2017 financial statements?

• A) Increased total assets.
• B) Decreased total assets.
• C) Increased income.
• D) Decreased investment account.

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Definitions:

Marginal Cost

The monetary outlay for producing an additional unit of a good or service.

Fixed Costs

Expenses that do not change in the short term regardless of the level of production or sales, such as rent and salaries.

Average Total Cost Curve

A graph that shows the per unit cost of production at various levels of output.

Short-Run

A time period in which at least one factor of production is fixed, limiting the ability of firms to adjust to changes in market conditions fully.