Virginia Corporation common stock 1. On January 1, 2013, Dumar Industries acquired a 15% interest in Virginia Corporation through the purchase of 12,000 shares of Virginia Corporation common stock for $240,000. During 2013, Virginia Corp. paid $60,000 in dividends and reported a net loss of $90,000. Dumar is able to exert significant influence on Virginia. However, Dumar mistakenly records these transactions using the cost method rather than the equity method of accounting. Which of the following would show the correct presentation for Dumar’s investment using the equity method? Investment Net Account Earnings (loss) a. $90,000 ($30,000) b. $217,500 ($13,500) c. $226,500 ($13,500) d. $226,500 ($4,500) 2. Consolidated financial statements are prepared when a company owns _________ of the common stock of another company. a. less than 20% b. between 20% and 50% c. less than 50% d. more than 50% 3. Consolidated financial statements present all of the following except the a. individual assets and liabilities of the parent company b. individual assets and liabilities of the subsidiary. c. total revenues and expenses of the subsidiary. d. All of these are presented in consolidated financial statements. 4. The company whose stock is owned by the parent company is called the a. controlled company. b. subsidiary company. c. investee company. d. sibling company. 5. A company that owns more than 50% of the common stock of another company is known as the a. charge company. b. subsidiary company. c. parent company. d. management company. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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