Use the Following Information to Answer Questions
Pentagon Company

question 15

Multiple Choice

Use the following information to answer Questions
Pentagon Company acquired 90% of Smoker Company's common stock for $1,300,000 and 40% of its preferred stock for $300,000.On January 1, 2013, the date of acquisition, the companies reported the following account balances: $\begin{array}{lrr}&\text { Pentagon Company } & \text { Smoker Company } \\\text { Preferred stock, } \$ 100 \text { par value } & \$ 800,000 & \$ 600,000 \\\text { Common stock, } \$ 10 \text { par value } & 2,000,000 & 1,000,000 \\\text { Other contributed capital } & 320,000 & 230,000 \\\text { Retained eamings } & 350,000 & 180,000 \\\text { Total stockholders' equity } & \$ 3,470,000 & \$ 2,010,000\end{array}$ The preferred stock is 10%, cumulative, nonparticipating, and has a liquidation value equal to 102% of par value.Dividends were not paid during 2012.During 2013, Smoker Company reported net income of $200,000 and declared and paid cash dividends in the amount of $120,000.
-Noncontrolling interest in the 2013 reported net income of Smoker Company is

• A)$50,000.
• B)$20,000.
• C)$80,000.
• D)$56,000.
• E)none of these.

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Definitions:

Managerial Accounting Information

Data provided for internal use by the management of a company to facilitate decision-making and business analysis.

Highly Aggregated

Referring to data or information that is combined or summarized at a high level, usually for the purpose of providing an overview or simplifying complex data.

Subunits

Smaller components or divisions of a larger organization, each responsible for certain tasks or functions within the overall entity.

Direct Materials Costs

The costs of raw materials or components that are directly used in the production of a product or service.