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Shandell Robinson University of Phoenix Final Exam February 9,2010 1.)C 10.)D 11.)C 12.)B 13.)B 14.)D 15.)A 16.)A 17.)C 18.)B 19.)C 20.)A 21.)A 22.)B...

#1. Ace purchases 40% of Baskett Company on January 1 for $500,000. Although not used, this acquisition gave Ace the ability to apply significant influence to the operating and financing policies of Baskett. Baskett reports assets on that date of $1,400,000 with liabilities of $500,000. Once building with a seven-year life is undervalued on Baskett’s books by $140,000. In addition, Baskett’s book value for equipment (10-year life) is undervalued by $212,000. During the year, Baskett reports net income of $90,000 while paying dividends of $30,000. What is the Investment in Baskett balance in Ace’s financial records as of December 31?

a. $504,000
b. $507,600
c. $513,900
d. $516,000

Shandell Robinson University of Phoenix Final Exam February 9,2010
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1.)D 2.)D 3.)C 4.)A 5.)A 6.)B 7.)D 8.)B 9.)C 10.)D 11.)C 12.)B 13.)B 14.)D 15.)A 16.)A 17.)C 18.)B 19.)C 20.)A 21.)A 22.)B 23.)A 24.)B 25.)A 26.)B 27.)A 28.)B 29.)D 30.)C
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