On January 1, 2013, Pride, Inc

question 125

Multiple Choice

On January 1, 2013, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong's stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill which has not been impaired.
As of December 31, 2013, before preparing the consolidated worksheet, the financial statements appeared as follows:
During 2013, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of this purchase had been paid for by Strong by the end of the year. 60% of these goods were still in the company's possession on December 31, 2013.
What is the total of consolidated operating expenses?

• A) $42,000.
• B) $47,600.
• C) $53,200.
• D) $49,000.
• E) $35,000.

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Definitions:

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Psychodynamic

A psychological perspective that emphasizes the systematic study of the psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.

Behavioural

Relating to or concerned with the actions or activities of living organisms in response to external or internal stimuli.

Humanistic

A psychological perspective that emphasizes the study of the whole person and the uniqueness of each individual, focusing on human freedom, dignity, and potential.