Keefe,Inc ,A Calendar-Year Corporation,acquires 70% of George Company on September

question 67

Multiple Choice

Keefe,Inc. ,a calendar-year corporation,acquires 70% of George Company on September 1,2010,and an additional 10% on April 1,2011.Total annual amortization of $6,000 relates to the first acquisition.George reports the following figures for 2011: $\begin{array} { l r } \text { Revenues } & \$ 500,000 \\\text { Expenses } & 400,000 \\\text { Retained earnings, 1/1/11 } & 300,000 \\\text { Dividends paid } & 50,000 \\\text { Common stock } & 200,000\end{array}$ Without regard for this investment,Keefe independently earns $300,000 in net income during 2011.
All net income is earned evenly throughout the year.
What is the controlling interest in consolidated net income for 2011?

• A)$373,300.
• B)$372,850.
• C)$371,500.
• D)$376,000.
• E)$372,805.

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Definitions:

Current Assets

Resources anticipated to be transformed into cash, disposed of, or utilized within a period of a year or over the duration of the company's operating cycle, depending on which timeframe extends further.

Long-term Investments

Investments in stocks, bonds, real estate, or other instruments that are not intended to be sold or liquidated within the next year.

Correcting Entry

An entry made in the accounting records to correct an error found in previously recorded transactions.

Accounts Payable

Liabilities owed by a business to its suppliers or vendors for goods or services received that have not yet been paid for.