On January 1, 2010, Jones Company Bought 15% of Whitton

question 67

Multiple Choice

On January 1, 2010, Jones Company bought 15% of Whitton Company. Jones paid $150,000 for these shares, an amount that exactly equaled the proportionate book value of Whitton. On January 1, 2011, Whitton acquired 80% ownership of Jones. The following data are available concerning Whitton's acquisition of Jones:
Consideration transferred for 80% interest, January 1, 2011: $800,000
Jones' reported book value, January 1, 2011: 900,000
Excess fair value over book value (assigned to trademarks) is amortized over 20 years.
The initial value method is used by both companies.
The following information is available regarding Jones and Whitton:
-What would be included in a consolidation worksheet entry for 2011?

• A) Debit treasury stock, $135,000.
• B) Credit treasury stock, $135,000.
• C) Debit treasury stock, $150,000.
• D) Credit treasury stock, $150,000.
• E) Debit common stock, $150,000.

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Definitions:

Position

Refers to a brand's or product's unique standing and identity in the marketplace relative to its competitors.

Consumers

Individuals or organizations that use economic services or commodities.

Dumping

the practice of exporting goods to another country at a price below the normal charge in the home market, often considered unfair competition.

Market Share

The share of a market dominated by a specific company or product, typically represented as a percent of the overall sales within that market.