On January 1, 2013, Race Corp

question 126

Multiple Choice

On January 1, 2013, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at year-end. Gallow's reported net income was $204,000, and Race's net income was $806,000. Race decided to use the equity method to account for this investment. What was the non-controlling interest's share of consolidated net income?

• A) $3,600.
• B) $22,800.
• C) $30,900.
• D) $32,900.
• E) $40,800.

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Definitions:

Habits

Regular tendencies or practices, especially ones that are hard to give up.

Reinforcement Schedules

The strategies used in behavior modification that determine how and when a response will be rewarded.

Mentally Alert

The state of being aware and able to think and respond quickly; sharpness of mind.

Intermittent

Occurring at irregular intervals; not continuous or steady.