On January 1, 2011, Deuce Inc

question 18

Multiple Choice

On January 1, 2011, Deuce Inc. acquired 15% of Wiz Co.'s outstanding common stock for $62,400 and categorized the investment as an available-for-sale security. Wiz earned net income of $96,000 in 2011 and paid dividends of $36,000. On January 1, 2012, Deuce bought an additional 10% of Wiz for $54,000. This second purchase gave Deuce the ability to significantly influence the decision making of Wiz. During 2012, Wiz earned $120,000 and paid $48,000 in dividends. As of December 31, 2012, Wiz reported a net book value of $468,000. For both purchases, Deuce concluded that Wiz Co.'s book values approximated fair values and attributed any excess cost to goodwill.
-What amount of equity income should Deuce have reported for 2012?

• A) $30,000.
• B) $16,420.
• C) $38,340.
• D) $18,000.
• E) $32,840.

Understand the concept of reverse engineering and its legality and ethical considerations.

Comprehend the strategies for choosing test market locations and the significance of geographical diversity in test marketing.

Understand the concept of the product life cycle and its stages: introduction, growth, maturity, and decline.

Recognize the impact of technological innovation on product adoption and market saturation.

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Definitions:

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow that hierarchical levels of human needs motivate behavior.

Exit Interviews

Meetings held with departing employees to gain insights into their work experience and reasons for leaving.