Sub Company Sells All Its Output at 20 Percent Above

question 52

Multiple Choice

Sub Company sells all its output at 20 percent above cost to Par Corporation.Par purchases its entire inventory from Sub.The incomes reported by the companies over the past three years are as follows:
Sub Company sold inventory for $300,000,$262,500 and $337,500 in the years 20X6,20X7,and 20X8 respectively.Par Company reported ending inventory of $105,000,$157,500 and $180,000 for 20X6,20X7,and 20X8 respectively.Par acquired 70 percent of the ownership of Sub on January 1,20X6,at underlying book value.The fair value of the noncontrolling interest at the date of acquisition was equal to 30 percent of the book value of Sub Company.
-Based on the information given above,what will be the income to noncontrolling interest for 20X8?

• A)$39,750
• B)$37,875
• C)$71,275
• D)$70,875

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Definitions:

Dominant Species

In a community, a species that as a result of its large biomass or abundance exerts a major influence on the distribution of populations of other species.

Common Species

A term referring to species that are frequently encountered within their habitat or geographical area, often well-adapted to living in human-altered environments.

Community

An assemblage of different populations that live together in a defined area and interact with each other.

Keystone Species

Species that have a disproportionately large effect on their natural environment relative to their abundance, often influencing both ecosystem structure and biodiversity.