On June 1, 2009, Blue Co

question 42

Multiple Choice

On June 1, 2009, Blue Co. distributed to its common stockholders 200,000 outstanding common shares of its investment in Red, Inc., an unrelated party. The carrying amount on Blue's books of Red's $1 par common stock was $2 per share. Immediately after the declaration, the market price of Red's stock was $2.50 per share. In its income statement for the year ended June 30, 2009, what amount should Blue report as gain before income taxes on disposal of the stock?

• A)$ 0.
• B)$100,000.
• C)$400,000.
• D)$500,000 Property dividends are recorded at the fair value of the property distributed, with any gain or loss being recognized in the current period.$2.50 - 2.00 = $.50 200,000 = $100,000.

Distinguish between different sections of costs in a production cost report.

Compute physical units and equivalent units for materials and conversion costs.

Determine unit costs for materials, conversion costs, and total manufacturing costs.

Prepare journal entries for transactions in process cost accounting.

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Definitions:

Pattern Bargaining

A labor negotiation strategy where unions use the outcome of one successful negotiation as a model or "pattern" for subsequent negotiations with other employers.

Legal Bargaining Item

Issues or matters that are legally required to be negotiated in good faith between unions and employers during collective bargaining.

Union Representation

The act of a labor union acting as the intermediary between the workforce and management to discuss employment terms, grievances, and rights.

Closed Shop Provisions

Labor agreement terms requiring that employees be members of a labor union as a condition of employment, now illegal in many places under "right to work" laws.