If Errant Used the Equity Method to Account for Its

question 49

Multiple Choice

If Errant used the equity method to account for its investment in Grub and had net income of $160,000 from its own operations (before making any entries to reflect its investment in Grub) , what consolidated net income would Errant report in its consolidated income statement for the year ended December 31, 2018?

• A) $90,000.
• B) $160,000.
• C) $230,000.
• D)$250,000.

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Definitions:

Punctuated Equilibrium

A theory in evolutionary biology suggesting that species experience periods of significant changes (punctuations) in short timespans, separated by longer periods of stability (equilibrium).

Additive Task

A task in which the contributions of all group members are combined to produce a final outcome.

Process Losses

Group performance difficulties stemming from the problems of motivating and coordinating larger groups.

Conjunctive Task

A task in which the performance of a group is dependent on the abilities of the weakest member, highlighting the importance of each member's contribution to achieving a collective goal.