ACC401018SC027-1132-001 Adv Accounting I

Apr 30th, 2015
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Prior Industries acquired an 80 percent interest in Sanderson Company by purchasing 24,000 of its 30,000 outstanding shares of common stock at book value of $105,000 on January 1, 2010. Sanderson reported net income in 2010 of $45,000 and in 2011 of $60,000 earned evenly throughout the respective years. Prior received $12,000 dividends from Sanderson in 2010 and $18,000 in 2011. Prior uses the equity method to record its investment.

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Current Location ACC401018SC027-1132-001 Adv Accounting I Week 4 Review Test Submission: Quiz 3 Question 1 2 out of 2 pointsPrior Industries acquired an 80 percent interest in Sanderson Company by purchasing 24,000 of its 30,000 outstanding shares of common stock at book value of $105,000 on January 1, 2010. Sanderson reported net income in 2010 of $45,000 and in 2011 of $60,000 earned evenly throughout the respective years. Prior received$12,000 dividends from Sanderson in 2010 and $18,000 in 2011. Prior uses the equity method to record its investment.The balance of Priors Investment in Sanderson account at December 31, 2011 is:Answer Selected Answer: $159,000.Correct Answer: $159,000.Question 2 2 out of 2 pointsP Company purchased 80% of the outstanding common stock of S Company on May 1, 2011, for a cash payment of $1,272,000. S Companys December 31, 2010 balance sheet reported common stock of $800,000 and retained earnings of $540,000. During the calendar year 2011, S Company earned $840,000 evenly throughout the year and declared a dividend of $300,000 on November 1. What is the amount needed to establish reciprocity under the cost method in the preparation of a consolidated workpaper on December 31, 2012?Answer Selected Answer: $208,000Correct Answer: $208,000Question 3 2 out of 2 pointsConsolidated net income for a parent company and its partially owned subsidiary is best defined as the pa

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