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:

Amortized

The gradual reduction of a debt over a specified period of time by making regular payments of principal and interest.

Fair Value

A measure of the worth of an asset or liability, based on its current market price or the price it would fetch in an orderly transaction at the measurement date.

Controlling Interest

The ownership of a majority of a firm's stock, giving the shareholder the ability to control decisions and operations.

Amortized

The process of gradually paying off a debt or reducing the value of an intangible asset through regular payments over a set period.