10) On January 1, 20x9 Pathlon Corporation, at underlying book value. For the same year, Sopteron report Company acquired 30 percent of the common stock of Sopteron which includes a gain from discontinued operations of $40,000. It dd n ed net income of $ 55,000, year. By what amount would Pathlon's investment in Sopteron Corpor ot pay any dividends during the increase for the year, W Pathlon used the equity method? A) $0 B) S16,500 C) $4,500 D) $12,000 11) Consolidated financial statements tend to be most useful for A) Creditors of a consolidated subsidiary B) Investors and long-term creditors of the parent company C) Short-term creditors of the parent company D) Stockholders of a consolidated subsidiary 12) Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo. Company Esstwo owns 100 pcrcent of Company Essthree. Consolidated financial statements should be prepared to report the financial status and results of operations for: A) Pea. B) Pea plus Essone. C) Pea plus Essone plus Esstwo. D) Pea plus Essone plus Esstwo plus Essthree. 13) In which of the following cases would consolidation be inappropriate? A) The subsidiary is in bankruptcy B) Subsidiary's operations are dissimilar from those of the parent. C) The parent owns 90 percent of the subsidiary's common stock, but all of the subsidiary's nonvoting preferred stock is held by a single investor. D) Subsidiary is foreign. 14) On January 1, 20X8, Peta Company acquired 85 percent of Star Company's common stock for $100,000 cash. The fair value of the noncontrolling interest was determined to be 15 percent of the book value of Star at that date. What portion of the retained carnings reported in the consolidated balance sheet prepared immediately after the business combination is assigned to the noncontrolling interest? A) None B) 15 percent C) 100 percent D) Cannot be determined