The Following Information Pertains to Questions

question 18

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 the gain or loss arising from Dine's share issue to Chompster?

• A)A loss of $4,000
• B)A gain of $4,000
• C)A gain of $2,400
• D)A loss of $2,400

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Definitions:

Premixed Insulin

Insulin preparations that combine specific proportions of intermediate-acting and fast-acting insulin to simplify dosing for patients.

BGM

Blood Glucose Monitoring, which is a way of testing the concentration of glucose in the blood.

SMBG Testing

Self-Monitoring of Blood Glucose, a method used by individuals with diabetes to check their blood sugar levels regularly at home.

Insulin Activity

The biological action of insulin in regulating glucose levels in the blood, including its onset, peak time, and duration.