Paul Corporation Owns 70 Percent of the Voting Common Shares

question 27

Multiple Choice

Paul Corporation owns 70 percent of the voting common shares of Sally Corporation,purchased at book value.Noncontrolling interest was assigned $21,000 of income in the 20X0 consolidated income statement.What amount of net income did Sally Corporation report for the year?

• A)$70,000
• B)$63,000
• C)$30,000
• D)$147,000

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Definitions:

Liquidity

A measure of how quickly and easily assets can be converted into cash without significant loss in value.

Accounts Receivable

Funds that clients owe to a company for products or services delivered on credit.

Gross Profit

The financial metric resulting from subtracting the cost of goods sold from net sales revenue.

Operating Expenses

Operating expenses are costs associated with the day-to-day functions of a business, excluding direct production costs but including things like rent, utilities, and staff wages.