On January 1, 2011, Pride, Inc

question 53

Multiple Choice

On January 1, 2011, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong's stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill which has not been impaired. As of December 31, 2011, before preparing the consolidated worksheet, the financial statements appeared as follows: During 2011, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of this purchase had been paid for by Strong by the end of the year. 60% of these goods were still in the company's possession on December 31.
What is the consolidated total of non-controlling interest appearing in the balance sheet?

• A) $100,800.
• B) $97,440.
• C) $93,800.
• D) $120,400.
• E) $117,040.

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Definitions:

Perfectly Inelastic

A demand situation where the quantity demanded does not change regardless of the price level.

Excise Tax

is a tax directly levied on certain goods, services, or activities, often with the intent to reduce their consumption or generate revenue.

Market Price

The current price at which a good or service can be bought or sold in a given market, reflecting supply and demand dynamics.

Tax Revenue

The wealth gathered by governments by imposing taxes.