Use the Following Information to Answer the Question(s) Below

question 36

Multiple Choice

Use the following information to answer the question(s) below.

Pace Corporation owns 70% of Abaza Corporation and 60% of Babon Corporation. Abaza Corporation owns 20% of Babon Corporation. Pace's investment in Abaza was consummated in one transaction at a purchase price $20,000 in excess of the book value. Pace's purchase of Babon was made in one transaction at a price $30,000 above book value. Abaza's investment in Babon was completed in one transaction at a purchase price $10,000 in excess of the book value. The purchase price differential for all three investments was attributable to goodwill. (There were no fair value/book value differences in assets and liabilities for each investment.) Pace's separate net income for the current year is $100,000. Abaza's separate net income is $190,000, which includes a $10,000 unrealized loss on the sale of land to Pace. Babon's separate net income is $150,000. Separate net incomes exclude investment income.

-The amount of noncontrolling interest share for the current year is

• A)$69,000.
• B)$85,000.
• C)$95,000.
• D)$99,000.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Variable Cost

Expenses in a business operation that fluctuate with the level of output, such as materials and labor costs.

Utilization

The degree to which a resource, such as equipment or labor, is being used effectively to produce goods or services.

Efficiency

A measure of how well resources (time, energy, costs) are used to achieve a goal or perform a process with minimal waste or effort.