Pepe, Incorporated Acquired 60% of Devin Company on January 1

question 115

Multiple Choice

Pepe, Incorporated acquired 60% of Devin Company on January 1, 2010. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2010 and 2011, respectively. Pepe uses the equity method to account for its investment in Devin.
-Compute the noncontrolling interest in the net income of Devin for 2010.

• A) $116,400.
• B) $120,400.
• C) $120,000.
• D) $123,200.
• E) $112,000.

---

Definitions:

Shaft Revolution

The number of rotations that a shaft completes in a given period of time, often measured in revolutions per minute (RPM).

Permissable Operating Angles

The maximum angles at which certain mechanical components, such as driveshafts, can operate without causing damage or undue wear.

Driveshaft Rpm

Driveshaft Rpm (Revolutions per Minute) measures the rotational speed of the driveshaft in a vehicle, indicating how many times the shaft completes a full rotation in one minute.

U-joint Working Angles

The angles at which a universal joint operates, crucial for the proper transfer of rotary motion in drivelines.