1. Using the fully adjusted equity method, an intercompany gain on an upstream sale of land is:
-recognized by the parent and the deferral is shared between the controlling and noncontrolling stockholders of the subsidiary.
-recognized by the subsidiary and the deferral is shared between the controlling and noncontrolling stockholders of the subsidiary.
-deferred by the subsidiary until the land is sold to an entity outside the consolidated group.
-recognized by the subsidiary and the deferral is completely allocated to the controlling stockholders of the subsidiary.
2. You need $20,000 for your project. A bank gives you the following terms:
six months at 8% interest, with a 10% compensating balance.
How much will you need to borrow?
$18,000
$2000
$20,000
$22,222