In the Consolidated Income Statement of Wattlebird Corporation and Its

question 12

Multiple Choice

In the consolidated income statement of Wattlebird Corporation and its 85% owned Forest subsidiary,the noncontrolling interest share was reported at $45,000.Assume the book value and fair value of Forest's net assets were equal at the acquisition date.What amount of net income did Forest have for the year?

• A)$52,941
• B)$38,250
• C)$235,000
• D)$300,000

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Definitions:

Capital Gain

The profit from the sale of a capital asset, such as stocks or real estate, where the sale price exceeds the purchase price.

Dividends

Payments made by a corporation to its shareholder members, often derived from the company's profits.

Shares

Shares represent units of ownership interest in a company or financial asset that provide an equal distribution in any profits, if any are declared, in the form of dividends.

Quarterly Dividend

A payment made by a corporation to its shareholders, typically every three months, as a distribution of profits.