Phelps CoUses the Sophisticated Equity Method to Account for the 80

question 33

Multiple Choice

Phelps Co.uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp.At the time of the acquisition, the fair values of the net asset required approximated their book values.Based upon the following information, what amount of income is attributable to the non-controlling interest? $\begin{array}{lr}\text { Phelps internally generated income: } & \$ 250,000 \\\text { Shore internally generated income: } & \$ 50,000 \\\text { Intercompany profit on Shore beginning inventory: } & \$ 10,000 \\\text { Intercompany profit on Shore ending inventory: } & \$ 15,000\end{array}$

• A)$10,000
• B)$9,000
• C)$11,000
• D)$7,000

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Definitions:

Organically-grown Produce

Fruits and vegetables cultivated without the use of synthetic pesticides, fertilizers, or genetically modified organisms (GMOs).

Grass-fed Beef

Beef from cows that have been fed only grass and forage throughout their lives, as opposed to grain-fed or conventionally raised counterparts.

Global Retailer

A retail company that operates outlets in multiple countries, offering products and services to a worldwide customer base.

Lifestyle Improvements

Enhancements or changes in habits and actions that contribute to a more satisfactory, healthy, or affluent way of living.