Bauerly Co

question 83

Multiple Choice

Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2010, Devin made frequent sales of inventory to Bauerly. There were unrealized gains of $40,000 in the beginning inventory and $25,000 of unrealized gains at the end of the year. Devin reported net income of $137,000 for 2010. Bauerly decided to use the equity method to account for the investment. What is the non-controlling interest's share of Devin's net income for 2010?

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

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Definitions:

Corporate Charter

A corporate charter is a legal document issued by a government entity that establishes a corporation's existence and outlines its rights and obligations.

Transferability of Ownership

The capability to legally transfer one's ownership stake in an asset or a company to another party.

Stockholder

An individual or entity that owns shares in a corporation, thus having a claim on its profits and assets.

Transfer

The act of moving money or goods from one place, account, or person to another.