The Following Information Has Been Taken from the Consolidation Worksheet

question 91

Multiple Choice

The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary, Stage Company.
(1) ) Graham reports a loss on sale of land of $5,000. The land cost Graham $20,000.
(2) ) Non-controlling interest in Stage's net income was $30,000.
(3) ) Graham paid dividends of $15,000.
(4) ) Stage paid dividends of $10,000.
(5) ) Excess acquisition-date fair value over book value was expensed by $6,000.
(6) ) Consolidated accounts receivable decreased by $8,000.
(7) ) Consolidated accounts payable decreased by $7,000.
Where does the non-controlling interest in Stage's net income appear on a consolidated statement of cash flows?

• A) $30,000 added to net income as an operating activity on the consolidated statement of cash flows.
• B) $30,000 deducted from net income as an operating activity on the consolidated statement of cash flows.
• C) $30,000 increase as an investing activity on the consolidated statement of cash flows.
• D) $30,000 decrease as an investing activity on the consolidated statement of cash flows.
• E) Non-controlling interest in Stage's net income does not appear on a consolidated statement of cash flows.

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Definitions:

Demand Requirements

The quantity of products or services that the market requires at any given time.

Transportation Model

A mathematical model used to plan and optimize the transportation of goods from several sources to several destinations, minimizing the cost of transportation.

Linear Programming

An optimization method for achieving the best outcome in a mathematical model whose requirements are represented by linear relationships.

Holding Costs

Expenses associated with storing inventory over a certain period, including warehousing, insurance, depreciation, and opportunity costs, among others.