Parent Computer Corporation Acquired Significant Influence Over Child Computer Company

question 39

Essay

Parent Computer Corporation acquired significant influence over Child Computer Company on January 2 by purchasing 20 percent of its outstanding stock for $100 million.Parent attributes the entire excess of cost over book value acquired to a patent, which it amortizes over 10 years.Child Computer had earnings of $100 million and declared dividends of $30 million during the year.The accounts receivable of Parent Computer Corporation at December 31 included $600,000 due from Child Computer.Parent Computer Corporation accounts for its investment in Child Computer using the equity method.Parent Computer Corporation considers reducing its ownership from 20 percent to 19.5 percent so that it no longer has to use the equity method.Comment on the ethical implications of this possibility.

Identify the role and impact of maintenance activities within a group.

Recognize behavior profiles that may hinder group operations and strategies to cope with them.

Grasp the importance of dealing with team process issues, including managing disagreements and improving decision making.

Comprehend different approaches to team building and their effectiveness.

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Definitions:

Comparative Advantage

The capability of an entity to generate a specific product or offer a service with lesser marginal and opportunity costs compared to others.

Trade Benefits

Trade benefits refer to the advantages a country gains from engaging in international trade, such as increased economic growth, diversity of goods, and improved efficiency.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, leading to more efficient economic outcomes.

Production Data

Information and statistics regarding the quantity and quality of goods and services produced within an economy.