Pepe, Incorporated Acquired 60% of Devin Company on January 1

question 46

Multiple Choice

Pepe, Incorporated acquired 60% of Devin Company on January 1, 2010. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2010 and 2011, respectively. Pepe uses the equity method to account for its investment in Devin.
-What is the consolidated gain or loss on equipment for 2010?

• A) $0.
• B) $9,000 gain.
• C) $9,000 loss.
• D) $21,000 gain.
• E) $21,000 loss.

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Definitions:

Analgesics

Medications designed to relieve pain without causing the loss of consciousness, often over-the-counter or prescription drugs.

Intensive Care Unit

A specialized department in a hospital that provides comprehensive and continuous care for patients who are critically ill or require life support.

Painful Stimuli

External prompts or triggers that cause pain sensations, used in medical assessments to evaluate consciousness or neurological responses.

Pain Management

The process of providing medical care that reduces or eliminates the uncomfortable sensation caused by disease, injury, or surgery.