Sub Company Sells All Its Output at 20 Percent Above

question 25

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 controlling interest for 20X8?

• A)$615,375
• B)$686,250
• C)$690,000
• D)$694,000

---

Definitions:

Selecting a Personality Approach

The process of choosing a theoretical framework for understanding, evaluating, and explaining an individual's personality and behavior.

Right or Wrong

Concepts pertaining to ethics and morality, often discussed in the context of moral psychology and the study of how individuals make judgments about what is morally correct or incorrect.

Conscientiousness

A personality trait characterized by organization, dependability, discipline, and a goal-directed behavior; one of the Big Five personality traits.

Trait Psychologist

A psychologist who studies and focuses on identifying, measuring, and conceptualizing individual differences in personality traits and how these traits influence behavior.