Prescott Inc

question 76

Multiple Choice

Prescott Inc. owned 80% of the voting common stock of Hutchins Corp. During 2021, Hutchins made several sales of inventory to Prescott. The total selling price was $190,000 and the cost was $105,000. At the end of the year, 30% of the goods were still in Prescott's inventory. Hutchins's reported net income was $320,000. Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what was the net income attributable to the noncontrolling interest in Hutchins?

• A) $47,000.
• B) $58,900.
• C) $64,000.
• D) $69,100.
• E) $90,900.

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Definitions:

Income Inequality

The unequal distribution of an economy’s total income among households or families.

Minimum Standard

A predefined level of quality, performance, or capability that products, services, or processes must meet or exceed, often set by regulatory bodies.

Marginal Tax Rate

The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify, essentially the tax rate on your last dollar of income.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, often aimed at ensuring tax equity.