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39. Which one of the following does not suggest th...

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39. Which one of the following does not suggest the presence of significant influence? A. One company holds 15 percent of the common stock of another company, but the remaining shares are widely dispersed. B. One company acquires 75 percent of another company's convertible bonds. C. A majority of the board of directors of one company is also on the board of directors of another company. D. One company holds an investment of 25 percent of the common stock of another company. 40. When using the equity method of accounting for an investment, as compared to the cost method, an investor will: A. record a greater amount of investment income B. record a smaller amount of investment income C. record either a greater or smaller amount of investment income D. record the same amount of investment income 41. On December 31, 2009, Rudd Company purchased 80 percent of the common stock of Wilton Company. At the time, Rudd held land with a book value of $100,000 and a fair value of $260,000; Wilton held land with a book value of $50,000 and fair value of $600,000. Using the parent company theory, at what amount would land be reported in a consolidated balance sheet prepared immediately after the combination? A. $550,000. B. $590,000. C. $700,000. D. $860,000.

 

Paper#10021 | Written in 18-Jul-2015

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