Bauerly Co

question 59

Multiple Choice

Bauerly Co.owned 70% of the voting common stock of Devin Co.During 2017, Devin made frequent sales of inventory to Bauerly.There was deferred intra-entity gross profit of $40,000 in the beginning inventory and $25,000 of intra-entity gross profit at the end of the year.Devin reported net income of $137,000 for 2017.Bauerly decided to use the equity method to account for the investment.Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what is the net income attributable to the noncontrolling interest for 2017?

• A) $41,100.
• B) $33,600.
• C) $21,600.
• D) $45,600.
• E) $36,600.

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Definitions:

Risky Decisions

Choices made under conditions of uncertainty that have the potential for significant positive or negative outcomes.

Simple Obstacles

Easily identifiable and straightforward hindrances or challenges that can impede progress or achievement of a goal.

Learning from Experience

The act of gaining knowledge or skill by directly engaging in and reflecting upon specific actions or events.

Educational Background

The formal schooling and training a person has received, including degrees, certifications, and other qualifications.