On January 1,20X7,Server Company Purchased a Machine with an Expected

question 23

Multiple Choice

On January 1,20X7,Server Company purchased a machine with an expected economic life of five years.On January 1,20X9,Server sold the machine to Patron Corporation and recorded the following entry:
Patron Corporation holds 75 percent of Server's voting shares.Server reported net income of $50,000,and Patron reported income from its own operations of $100,000 for 20X9.There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
-Based on the preceding information,income assigned to the noncontrolling interest in the 20X9 consolidated income statement will be:

• A)$12,000.
• B)$14,000.
• C)$12,500.
• D)$48,000.

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Definitions:

Retirement Annuity

A financial product that provides a stream of payments to an individual after retirement, funded through either periodic or lump sum contributions.

IRA

An Individual Retirement Account, a financial tool used in the United States to save for retirement with tax advantages.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are managed by professionals.

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