Edgar Co Acquired 60% of Stendall Co

question 78

Multiple Choice

Edgar Co. acquired 60% of Stendall Co. on January 1, 2011. During 2011, Edgar made several sales of inventory to Stendall. The cost and selling price of the goods were $140,000 and $200,000, respectively. Stendall still owned one-fourth of the goods at the end of 2011. Consolidated cost of goods sold for 2011 was $2,140,000 because of a consolidating adjustment for intra-entity sales less the entire profit remaining in Stendall's ending inventory.
-How would noncontrolling interest in net income have differed if the transfers had been for the same amount and cost, but from Stendall to Edgar?

• A) Noncontrolling interest in net income would have decreased by $6,000.
• B) Noncontrolling interest in net income would have increased by $24,000.
• C) Noncontrolling interest in net income would have increased by $20,000.
• D) Noncontrolling interest in net income would have decreased by $18,000.
• E) Noncontrolling interest in net income would have decreased by $56,000.

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Definitions:

Hybridizations

The concept in chemistry where atomic orbitals mix to form new hybrid orbitals suitable for the pairing of electrons to form chemical bonds in molecules.

Formaldehyde

A colorless, strong-smelling gas used in making building materials and many household products, known chemically as CH2O.

IUPAC Name

The systematic naming of chemical compounds as recommended by the International Union of Pure and Applied Chemistry, ensuring consistency and clarity worldwide.

IUPAC Name

The methodical identification of chemical substances according to guidelines set by the International Union of Pure and Applied Chemistry.