Hardcore Mining Company acquired 88 percent of the common stock of Mountain Trucking Company on January 1,

Question:

Hardcore Mining Company acquired 88 percent of the common stock of Mountain Trucking Company on January 1, 20X2, at a cost of $30 per share. On December 31, 20X7, when the book value of Mountain Trucking stock was $70 per share, Hardcore sold one-quarter of its investment in Mountain Trucking to Basic Manufacturing Company for $90 per share.

Required

What effect will the sale have on the 20X7 consolidated financial statements of Hardcore Mining if,

(a) Basic Manufacturing is an unrelated company or

(b) Hardcore Mining holds 60 percent of Basic's voting shares?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...