A bail bond is an example of a letter of credit

If the defendant is not informed of his or her legal rights at the time of the arrest, any statements the defendant makes at the time of the arrest will be inadmissible at the defendant's trial

Indicate whether the statement is true or false

On January 1, 2016, Pepper Company purchased 90% of the common stock of Salt Company for $360,000 when Salt had total shareholders' equity as follows:

8% Preferred Stock, $100 par $100,000 Common Stock, $10 par 50,000 Other Paid-in Capital 120,000 Retained Earnings 180,000 Total $450,000 Any excess of cost over book value on this date is attributed to a patent, to be amortized over 10 years. The 8% preferred stock is cumulative, non-participating, and has a liquidating value of par plus dividends in arrears. There were no preferred dividends in arrears on January 1, 2016 . Pepper elected to account for its investment in Salt using the simple equity method. During 2016, Salt had a net loss of $10,000 and paid no dividends. In 2017, Salt had net income of $100,000 and paid dividends totaling $36,000 . During 2017, Salt sold merchandise to Pepper for $40,000, of which $20,000 is still held by Pepper on December 31, 2017 . Salt's usual gross profit is 40%. Required: Complete the Figure 7-7 worksheet for consolidated financial statements for the year ended December 31, 2017 . Figure 7-7 Trial Balance Eliminations and Pepper Salt Adjustments Account Titles Company Company Debit Credit Inventory 60,000 40,000 Other Current Assets 154,200 174,000 Invest in Salt Company 408,600 Land 120,000 80,000 Buildings and Equipment 450,000 370,000 Accumulated Depreciation (200,000) (80,000) Current Liabilities (80,000) (60,000) Long-Term Liabilities (100,000) (20,000) Common Stock – P Co. (200,000) Other Pd-in Capt – P Co. (100,000) Retained Earnings – P Co. (400,000) Preferred Stk, 8% – S Co. (100,000) RE to Pref Stk – S Co. Common Stock – S Co. (50,000) Other Pd-In Capt – S Co. (120,000) Retained Earnings – S Co. (170,000) Net Sales (500,000) (450,000) Cost of Goods Sold 300,000 270,000 Operating Expenses 120,000 80,000 Investment Income (82,800) Div. Declared – P Co. 50,000 Div. on Pref Stk – S Co 16,000 Div. on Comm Stk – S Co. 20,000 Consolidated Net Income Allocated to: NCI-Preferred NCI-Common Controlling Interest Total NCI Controlling RE 12/31 0 0 Consol. Control. Consol. Income Retained Balance Account Titles Statement NCI Earnings Sheet Inventory Other Current Assets Invest in Salt Company Land Buildings and Equipment Accumulated Depreciation Current Liabilities Long-Term Liabilities Common Stock – P Co. Other Pd-in Capt – P Co. Retained Earnings – P Co. Preferred Stk, 8% – S Co. RE to Pref Stk – S Co. Common Stock – S Co. Other Pd-In Capt – S Co. Retained Earnings – S Co. Net Sales Cost of Goods Sold Operating Expenses Investment Income Div. Declared – P Co. Div. on Pref Stk – S Co Div. on Comm Stk – S Co. Consolidated Net Income Allocated to: NCI-Preferred NCI-Common Controlling Interest Total NCI Controlling RE 12/31