Question
Press Corporation sells three-quarters of its 80% interest in Sim Corporation on January 1, 2021 for $352,500, leaving it holding 20% of Sims outstanding stock.
Press Corporation sells three-quarters of its 80% interest in Sim Corporation on January 1, 2021 for $352,500, leaving it holding 20% of Sims outstanding stock. Under this situation, Press loses control of Sim. The following data relate to the discontinuance of consolidation. Fair value of Sim as a whole $587,500 Carrying amount of Press 80% interest in Sim $482,400 Fair value of remaining 20% interest in Sim 117,500 The entry representing the sale of investment needed on January 1, 2021 includes: Select one: a. Debit Cash $352,500 Credit Investment in Sim $222,600; Gain on sale of investment $129,900 b. Debit Cash $352,500; Loss on sale of investment $12,400 Credit Investment in Sim $364,900. c. Debit Cash $352,500; Loss on sale of investment $129,900 Credit Investment in Sim $482,400 d. Debit Cash $352,500 Credit Investment in Sim $352,500.
HELP MEEEEE
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started