The Following Information Has Been Taken from the Consolidation Worksheet

question 18

Multiple Choice

The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary, Stage Company.(1.) Graham reports a loss on sale of land (to an outside party) of $5,000. The land cost Graham $20,000.(2.) Noncontrolling interest in Stage's net income was $30,000.(3.) Graham paid dividends of $15,000.(4.) Stage paid dividends of $10,000.(5.) Excess acquisition-date fair value over book value amortization was $6,000.(6.) Consolidated accounts receivable decreased by $8,000.(7.) Consolidated accounts payable decreased by $7,000.Where does the noncontrolling interest in Stage's net income appear on a consolidated statement of cash flows?

• A) $30,000 added to net income as an operating activity on the consolidated statement of cash flows.
• B) $30,000 deducted from net income as an operating activity on the consolidated statement of cash flows.
• C) $30,000 increase as an investing activity on the consolidated statement of cash flows.
• D) $30,000 decrease as an investing activity on the consolidated statement of cash flows.
• E) Noncontrolling interest in Stage's net income does not appear on a consolidated statement of cash flows.

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Definitions:

Windpipe

Commonly known as the trachea, it's the tube that connects the larynx to the bronchi, providing air passage to the lungs.

Trachea

Also known as the windpipe, it is a large membranous tube reinforced by rings of cartilage, extending from the larynx to the bronchial tubes and conveying air to and from the lungs.

Primary Bronchi

The two main branches of the trachea that lead directly into the lungs, providing the passage for air to enter and leave the lungs.

Pharynx

The muscular tube that extends from the back of the nasal cavities and mouth down to the esophagus and larynx, serving both respiratory and digestive functions.