Pendleton Company Acquired a 70% Interest in Sunflower Company on December

question 6

Multiple Choice

Pendleton Company acquired a 70% interest in Sunflower Company on December 31, 2016, for $380,000. During 2017 Sunflower had a net income of $30,000 and paid a cash dividend of $10,000. Applying the cost method would give a debit balance in the Investment in Stock of Sunflower Company account at the end of 2017 of:

• A) $400,000.
• B) $394,000.
• C) $373,000.
• D) $380,000.

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Definitions:

Ampullae

Small bulbous structures, especially in the context of the ampullae of Lorenzini in sharks, sensing electric fields and temperature.

Cochlear Duct

A spiral-shaped cavity within the cochlea of the inner ear, filled with fluid and containing the organ of Corti, which produces nerve impulses in response to sound vibrations.

Outer Ear

Portion of the ear consisting of the pinna and the auditory canal.

Middle Ear

Portion of the ear consisting of the tympanic membrane, the oval and round windows, and the ossicles, where sound is amplified.