When Jolt Co

question 99

Multiple Choice

When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair value of $100,000. What amount should have been reported for the land in a consolidated balance sheet, assuming the investment was obtained prior to January 1, 2009 and the purchase method of accounting for business combinations was used?

• A) $70,000.
• B) $75,000.
• C) $85,000.
• D) $92,500.
• E) $100,000.

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Definitions:

Demand Function

A mathematical equation that describes the relationship between the quantity demanded of a good and its price, along with other factors like income and price of related goods.

Fixed Cost

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.

Expense Equation

A formula used to calculate the total expenses by adding various costs and expenses associated with operating a business or managing personal finances.

Markup

The amount added to the cost price of goods to cover overhead and profit.