The Following Information Pertains to Questions

question 45

Multiple Choice

The following information pertains to questions
Whine purchased 80% of the outstanding voting shares of Dine Inc.on December 31,2009.The Balance Sheets of both companies on that date are shown below: Chompster Inc. ,one of Whine's main competitors has agreed to acquire an equity interest in Dine Inc.As a result of the agreement,Dine Inc.would issue another 8,000 shares (over and above the 32,000 shares it currently has outstanding) to Chompster for $20 per share.
The acquisition differential on the date of acquisition was attributed entirely to equipment which had a remaining useful life of ten years from the date of acquisition.
Whine Inc.uses the equity method to account for its investment in Dine Inc.There were no unrealized intercompany profits on December 31,2009.
-What would be Whine's ownership interest in Dine following Chompster's purchase of Whine's shares?

• A)75%
• B)80%
• C)60%
• D)64%

---

Definitions:

Fibula

A long, thin bone located on the lateral side of the tibia in the lower leg.

Tibia

A large bone located in the lower leg, commonly known as the shinbone.

Patella

The knee cap; a small, round bone that sits in front of the knee joint, helping to protect it and enhance leverage for leg muscles.

Ischium

One of the three bones that make up the pelvis, helping to form the hip joint and bear the weight of the body in the sitting position.