Anderson Company, a 90% Owned Subsidiary of Philbin Corporation, Transfers

question 53

Multiple Choice

Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020. Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends.
Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute the net income attributable to the noncontrolling interest of Anderson for 2021.

• A)$8,500.
• B)$8,570.
• C)$8,430.
• D)$8,400.
• E)$7,580.

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Definitions:

Win-lose

A competitive situation or strategy in which one party’s gain is inherently the other's loss, opposed to a win-win scenario.

Fixed-amount

A specific, unchanging quantity, often referring to payments or financial transactions.

Time Warp

A hypothetical alteration of time that creates a discrepancy between it and the chronological sequence.

Win-lose

A negotiation or conflict resolution outcome where one party's gain is equivalent to another party's loss, creating a competitive and adversarial scenario.