Which of the following is true of budgeting? Question 1 options: Budgeting forces management to plan for the future. Budgeting creates a plan of action only in terms of production units. Budgeting eradicates the need for keeping a buffer against uncertainties in demand. Budgeting relies on the control cycle to design the planning cycle for future action. Budgeting focuses only on long-term objectives as covered by the planning cycle.

On january 2, well co. purchased 10% of rea, inc.’s outstanding common shares for $400,000, which equaled the carrying amount and the fair value of the interest purchased in rea’s net assets. well did not elect the fair value option. because well is the largest single shareholder in rea, and well’s officers are a majority on rea’s board of directors, well exercises significant influence over rea. rea reported net income of $500,000 for the year and paid dividends of $150,000. in its december 31 balance sheet, what amount should well report as investment in rea?