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

question 45

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 2011.

• A) $126,800.
• B) $130,000.
• C) $122,000.
• D) $130,000 .
• E) $129,600.

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Definitions:

Phylum Arthropoda

The largest phylum in the animal kingdom, including insects, arachnids, myriapods, and crustaceans, characterized by segmented bodies and jointed limbs.

Jointed Appendages

Characteristic features of arthropods, including insects and crustaceans, where limbs are jointed, allowing for movement.

Planarians

Flatworms belonging to the Turbellaria class, known for their remarkable regenerative ability and as subjects of biological research.

Circulatory System

The body system that functions in internal transport and protects the body from disease.