On January 1, Tasty Foods purchased 10,000 shares (100%) of Eco-Safe Packaging’s voting stock for $12 per share. Throughout the year, both companies continue to operate as separate legal entities. By December 31, Eco-Safe Packaging’s cash balance is $2,000, and Tasty Foods’ cash balance is $5,000. In preparing its year-end financial statements, for how much would Tasty Foods report its cash balance? a. $7,000.b. $5,000.c. $3,000.d. $2,000.
On January 1, Tasty Foods purchased 10,000 shares (100%) of Eco-Safe Packaging’s voting stock for $12 per share. Throughout the year, both companies continue to operate as separate legal entities. By December 31, Eco-Safe Packaging’s cash balance is $2,000, and Tasty Foods’ cash balance is $5,000. In preparing its year-end financial statements, for how much would Tasty Foods report its cash balance? a. $7,000.b. $5,000.c. $3,000.d. $2,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, Tasty Foods purchased 10,000 shares (100%) of Eco-Safe Packaging’s voting stock for $12 per share. Throughout the year, both companies continue to operate as separate legal entities. By December 31, Eco-Safe Packaging’s cash balance is $2,000, and Tasty Foods’ cash balance is $5,000. In preparing its year-end financial statements, for how much would Tasty Foods report its cash balance?
a. $7,000.
b. $5,000.
c. $3,000.
d. $2,000.
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