P Corp Owns 800 Voting Common Shares Out of Q Corp

question 63

Multiple Choice

P Corp. owns 800 voting common shares out of Q Corp.'s 1,000 outstanding voting common shares, which it accounts for using the equity method. On December 31, 2018, the shareholder's equity section of Q Corp. was comprised of $15,000 in common shares and retained earnings with the amount of $450,000. Q Corp. reported net Income and paid dividends of $120,000 and $20,000 respectively for the year ended December 31, 2019.
There have been no goodwill impairment losses since acquisition.
On January 1, 2020, P Corp. sold 200 shares of its investment in Q Corp. for $125,000.
On January 1, 2019, the investment account had a balance of $420,000. The acquisition differential was to be allocated as follows:
60% to patents (6 year remaining life) .
30% to equipment (9 year remaining life) .
What is the balance in the investment in Q account immediately following the sale?

• A) Nil.
• B) $80,000
• C) $295,200
• D) $370,200

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Definitions:

Sexual Intimacy

A close, personal, and often physical relationship between individuals, involving sexual activities or expressions of sexual feelings.

Relationship Stability

The extent to which a relationship is consistently reliable and secure over time, often characterized by trust, mutual respect, and the ability to withstand challenges.

Predictor

A variable or factor that can be used to forecast or estimate future events or outcomes based on current or past data.

Sexual Satisfaction

The degree to which an individual's sexual needs, desires, and expectations are fulfilled within a sexual relationship or experience.