Pepe, Incorporated Acquired 60% of Devin Company on January 1

question 29

Multiple Choice

Pepe, Incorporated acquired 60% of Devin Company on January 1, 2012. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2012 and 2013, respectively. Pepe uses the equity method to account for its investment in Devin.
Compute the non-controlling interest in the net income of Devin for 2013.

• A) $126,800.
• B) $130,000.
• C) $122,000.
• D) $130,800.
• E) $129,600.

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Definitions:

Theory X Management

A management style that assumes employees are inherently lazy and need to be closely supervised and controlled.

Task Delegation

The process of assigning responsibility and authority for specific tasks or activities from one individual, often a manager or leader, to another, typically a subordinate or team member.

Trusting Relationships

Trusting Relationships are connections between individuals or groups that are characterized by trust, reliability, and confidence in each other's integrity and abilities.

Team Member Extraversion

Describes the extent to which a team member possesses outgoing, energetic, and sociable behaviors within a team setting.