If Smith's Net Income Is $100,000 in the Year Following

question 71

Multiple Choice

If Smith's net income is $100,000 in the year following the acquisition,

• A) The portion allocated to the common stock (residual amount) is $92,800.
• B) $10,800 preferred stock dividend will be subtracted from net income attributed to common stock in arriving at noncontrolling interest in consolidated income.
• C) The noncontrolling interest in consolidated net income is $27,200.
• D) The preferred stock dividend will be ignored in noncontrolling interest in consolidated net income because Nichols owns the noncontrolling interest of preferred stock.
• E) The noncontrolling interest in consolidated net income is $30,800.

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Definitions:

Easement

A right granted to use the property of another for a specific purpose, such as right of way, without owning, possessing, or having any other title to the land.

Conveyance

The act of transferring ownership or interest in property from one party to another, typically through a legal document such as a deed or title.

Landlocked Properties

Properties that do not have direct access to a public road or thoroughfare, relying on easements for access.

Petitioning

The act of formally requesting something from an authority, typically through a written document.