Chain Co Owned All of the Voting Common Stock of Shannon

question 55

Multiple Choice

Chain Co. owned all of the voting common stock of Shannon Corp. The corporations' balance sheets dated December 31, 2012, include the following balances for land: for Chain--$416,000, and for Shannon-$256,000. On the original date of acquisition, the book value of Shannon's land was equal to its fair value. On April 4, 2013, Chain sold to Shannon a parcel of land with a book value of $65,000. The selling price was $83,000. There were no other transactions which affected the companies' land accounts during 2012. What is the consolidated balance for land on the 2013 balance sheet?

• A) $672,000.
• B) $690,000.
• C) $755,000.
• D) $737,000.
• E) $654,000.

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Definitions:

Consumer Goods

Products that are purchased for personal use or consumption by the general public, such as clothing, food, and electronics.

Farm Products

Commodities produced through agricultural activities, such as crops, livestock, and their by-products.

Fidelity Bond

A form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals, typically employees.

Corporate Funds

Money or financial resources that belong to a corporation and are used for its business operations and activities.