Bauerly Co

question 63

Multiple Choice

Bauerly Co.owned 70% of the voting common stock of Devin Co.During 2009,Devin made frequent sales of inventory to Bauerly.There were unrealized gains of $40,000 in the beginning inventory,and $25,000 at the end of the year.Devin reported net income of $137,000 for 2009.Bauerly decided to use the equity method to account for the investment.What is the noncontrolling interest's share of Devin's net income for 2009?

• A)$41,100.
• B)$33,600.
• C)$21,600.
• D)$45,600.
• E)$36,600.

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Definitions:

Changing Depreciation Methods

The process of altering the accounting method used to allocate the cost of a tangible asset over its useful life for financial reporting purposes.

Newly Acquired Assets

Newly acquired assets refer to assets that a company or individual has recently purchased or obtained, which can include equipment, property, or financial instruments.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by an independent organization, providing guidance on how to report financial events in a transparent and consistent manner globally.

GAAP

Generally Accepted Accounting Principles, a standardized set of accounting principles in the United States governing financial reporting and accounting.