On January 1, 2011, Race Corp

question 84

Multiple Choice

On January 1, 2011, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at year-end. Gallow's reported net income was $204,000, and Race's net income was $806,000. Race decided to use the equity method to account for this investment. What was the non-controlling interest's share of consolidated net income?

• A) $3,600.
• B) $22,800.
• C) $30,900.
• D) $32,900.
• E) $40,800.

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Definitions:

Linear

Describes a relationship or function that forms a straight line when graphed, denoting a constant rate of change between two variables.

Variables

Represent characteristics or quantities that can change and have different values for different individuals or objects in a study.

Nonlinear Relationship

Relationship between variables not appropriately represented by a straight line.

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Individuals who teach courses or are involved in academic research at a college or university.