P Company Owns an 80% Interest in S Company

question 33

Multiple Choice

P Company owns an 80% interest in S Company. During 2017, S sells merchandise to P for $200,000 at a profit of $40,000. On December 31, 2017, 50% of this merchandise is included in P's inventory. Income statements for P and S are summarized below: Noncontrolling interest in income for 2017 is:

• A) $4,000.
• B) $19,200.
• C) $20,000.
• D) $24,000.

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Definitions:

Sewing Machines

Mechanical or electronic devices used to stitch fabric or other materials together.

Trade Deficit

A situation where a country's imports exceed its exports during a specific period, leading to a net outflow of domestic currency to foreign markets.

Net Exports

The value of a country's total exports minus its total imports; a measure of a nation's foreign trade balance.

Exports

Goods or services produced in one country and sold to buyers in a foreign country.