On January 2,20X2,Piranha Company Acquired 70 Percent of Salmon Corporation's

question 18

Multiple Choice

On January 2,20X2,Piranha Company acquired 70 percent of Salmon Corporation's common stock for $420,000 cash.At the acquisition date,the book values and fair values of Salmon' assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 30 percent of the total book value of Salmon.The stockholders' equity accounts of the two companies at the acquisition date are as follows:
Noncontrolling interest was assigned income of $15,000 in Piranha's consolidated income statement for 20X2.
-Based on the preceding information,what will be the amount of net income reported by Salmon Corporation in 20X2?

• A)$45,000
• B)$50,000
• C)$75,000
• D)$105,000

Understand the treatment of underapplied or overapplied overhead in accounting records.

Identify and use relevant T-account summaries to track production costs and inventory movements.

Analyze raw material requisitions and the impact on cost of production.

Prepare journal entries related to manufacturing costs, including direct materials, direct labor, and manufacturing overhead.

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Definitions:

Safety Inventory

Additional stock that a company holds to prevent stockouts and ensure product availability, acting as a buffer against demand fluctuations.

Holding Cost

The expenses associated with keeping inventory in storage, including warehousing costs, insurance, depreciation, and potential obsolescence.

Standard Deviation

Standard deviation measures the amount of variation or dispersion of a set of values, indicating how much they deviate from the average.

Safety Inventories

Stocks of products or materials kept on hand to protect against uncertainties in supply or demand.