On January 1, 2011, Deuce Inc

question 100

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.
-On Deuce's December 31, 2012 balance sheet, what balance was reported for the Investment in Wiz Co. account?

• A) $139,560.
• B) $143,400.
• C) $310,130.
• D) $186,080.
• E) $182,250.

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Definitions:

Concept Learning

The process through which an individual learns to categorize objects, ideas, or situations into conceptual frameworks.

Associative Learning

Associative learning is a learning principle by which an organism makes connections between different elements or events, often through classical or operant conditioning, leading to the learning of relationships in the environment.

Expectancies

Beliefs or predictions about the likelihood of future outcomes or events, often influencing behavior and decision-making.

Mental Representations

Internal cognitive symbols, concepts, or images that represent external reality, allowing individuals to think about and function in the world.