Question #54

Reading: Reading 8 Intercorporate Investments

PDF File: Reading 8 Intercorporate Investments.pdf

Page: 24

Status: Unattempted

Part of Context Group: Q53-54
Shared Context
- After the acquisitions, minority interest reported by Company X will be: A) $168,000. B) $0. C) $72,000.
Question
The change in the investment in the associates account (the account that reflects all non- consolidated investments in other companies) between January 3 and December 31 is:
Answer Choices:
A. $11,400
B. $10,800
C. $27,600
Explanation
The investment in the associates account will increase from the proportionate income of Companies B and C, and will decrease from the dividends received from Companies B and C. The changes will be (0.3 × 20,000) + (0.4 × 30,000) − (0.3 × 8,000) − (0.4 × 12,000) = 10,800.
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