The Following Information Pertains to Questions

question 24

Multiple Choice

The following information pertains to questions
Duff Inc.owns 75% of Paddy Corp.and uses the Equity Method to account for its investment.Paddy purchased $120,000 worth of Duff's 12% par value bonds on January 1,2001 for $100,000,when Duff's bond liability consisted of $240,000 par of 12% Bonds maturing on January 1,2011.There was an unamortized bond discount of $20,000 attached to the bonds on that date.Interest payment dates are June 30 and December 31 each year.Straight line amortization is used.Both companies have a December 31 year end.Intercompany bond gains and losses are to be allocated to each company.During 2001,Paddy earned a net income of $80,000 and paid dividends of $20,000
-What amount would be shown on Duff's 2001 Consolidated Statement of Financial Position under bonds payable?

• A)$220,000
• B)$112,000
• C)$110,000
• D)$111,000

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Definitions:

Correlation

A statistical measure that describes the extent to which two variables change together, but not necessarily indicating that one causes the other.

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The overall capacity of an individual to understand complex ideas, adapt effectively to the environment, learn from experience, and engage in various forms of reasoning.

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Aggression Behavior

This is a range of actions or behaviors intended to harm or intimidate another individual, often manifesting through physical force or hostile acts.