What effect (if any) would Hanson's January 1, 2019 purchase have on the company's consolidated cash flows for the year?
A) There would be no effect.
B) There would be a decrease in cash of $45,000 to the consolidated entity.
C) There would be a decrease in cash of $200,000 to the consolidated entity.
D)There would be a decrease in cash of $236,000 to the consolidated entity.

Question

Quizplus · Accepted Answer

Hanson's purchase of 90% of the outstanding common stock of Nelson for $200,000 cash on January 1, 2019, would result in a decrease in cash of $200,000 to the consolidated entity.

What Effect (If Any) Would Hanson's January 1, 2019 Purchase