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:

Wage Earner's

Individuals whose income is derived primarily from their employment salary or wages.

Family Composition

The makeup or structure of a family, including the number of members, their relationships to each other, and their roles within the family unit.

Mean Household Income

The average income per household within a specified geographic location, calculated by dividing the total income of all households by the number of households.

Income Distribution

The way in which a nation’s total earnings are spread among its population, affecting economic inequality.