Gargiulo Company, a 90% Owned Subsidiary of Posito Corporation, Sells

question 14

Multiple Choice

Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012. Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.
Compute the non-controlling interest in Gargiulo's net income for 2013.

• A) $8,500.
• B) $8,570.
• C) $8,430.
• D) $8,400.
• E) $7,580.

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Definitions:

Total Stockholders' Equity

The total net worth of a company according to its balance sheet, calculated as total assets minus total liabilities.

Common Stock

A type of equity security representing ownership in a corporation, with holders typically having voting rights and receiving dividends.

Dividend Yield Ratio

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Common Stock

This refers to shares of ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.