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

question 9

Multiple Choice

Use the following information to answer the question(s) below.
Pew Corporation acquired 80% ownership of Sordid Incorporated,at a time when Pew's investment cost was equal to 80% of Sordid's book value.At the time of acquisition,the book values and fair values of Sordid's assets and liabilities were equal.Pew uses the equity method.During 2011,Pew sold goods to Sordid for $160,000 making a gross profit percentage of 20%.Half of these goods remained unsold in Sordid's inventory at the end of the year.Income statement information for Pew and Sordid for 2011 were as follows:

-The 2011 consolidated income statement showed noncontrolling interest share of

• A)$3,200.
• B)$6,400.
• C)$8,800.
• D)$12,000.

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Definitions:

Unliquidated Debt

A debt for which the exact monetary value has not been determined.

Consideration

Something of value exchanged between parties in a contract, required for the agreement to be legally binding.

Liquidated Debt

A debt for which the amount owed is known and agreed upon by both parties.

Liquidated Debt

A debt for which the exact monetary value has been determined and acknowledged by both the debtor and creditor.