On January 1, 20X7, Servant Company Purchased a Machine with an Expected

question 39

Multiple Choice

On January 1, 20X7, Servant Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Servant sold the machine to Master Corporation and recorded the following entry: Master Corporation holds 75 percent of Servant's voting shares. Servant reported net income of $50,000, and Master reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
Based on the preceding information, income assigned to the noncontrolling interest in the 20X9 consolidated income statement will be:

• A) $12,000.
• B) $14,000.
• C) $12,500.
• D) $48,000.

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