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

question 25

Multiple Choice

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

On December 31, 2013, Parminter Corporation owns an 80% interest in the common stock of Sanchez Corporation and an 80% interest in Sanchez's preferred stock. On December 31, 2013, Sanchez's stockholders' equity was as follows:
On December 31, 2013, preferred dividends are not in arrears. Sanchez had 2014 net income of $30,000 and only preferred dividends are declared and paid in 2014. There are no book value/fair value differentials associated with Parminter's investments.


-What should be the noncontrolling interest share,common in the consolidated financial statements of Parminter for the year ending December 31,2014?

• A)$5,000
• B)$20,000
• C)$25,000
• D)$30,000

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Definitions:

Production

Production is the process of creating goods and services by combining labor, materials, and technology to meet consumer demand.

Job-Order Costing

A cost accounting system that assigns costs to specific jobs or batches, used when products are distinct and easily identifiable.

Raw Materials Inventory

The total cost of all component parts currently in stock that have not yet been used in work-in-process or finished goods production.

Job-Order Costing

An accounting methodology used to assign costs to specific jobs or batches, typically in manufacturing or servicing environments.