Pat Corporation owns an 80 percent interest in Sam Corporation and a 70 percent interest in Ten Corporation. Ten owns a 10 percent interest in Sam. These investment interests were acquired at fair value equal to book value. The net incomes of the affiliates for 2016 were as follows:
Pat .................... $240,000
Sam ................... $ 80,000
Ten .................... $ 40,000
On December 31, 2016, Pat's inventory included $10,000 of unrealized profits on merchandise purchased from Sam during 2016, and Sam's land account reflected $15,000 unrealized profit on land purchased from Ten during 2016. These unrealized profits have not been eliminated from the net income amounts shown. Except for adjustments related to unrealized profits, the net income amounts were determined on a correct equity basis.
1. The separate incomes of Pat, Sam, and Ten for 2016 were:
a. $240,000, $80,000, and $32,000, respectively
b. $148,000, $80,000, and $32,000, respectively
c. $148,000, $72,000, and $40,000, respectively
d. $240,000, $72,000, and $40,000, respectively
2. The separate realized incomes of Pat, Sam, and Ten for 2016 were:
a. $138,000, $80,000, and $25,000, respectively
b. $138,000, $70,000, and $25,000, respectively
c. $123,000, $80,000, and $17,000, respectively
d. $148,000, $70,000, and $17,000, respectively
3. Controlling share of consolidated net income for Pat Corporation and Subsidiaries for 2016 was:
a. $220,800
b. $215,900
c. $214,400
d. $212,400
4. Noncontrolling interest share that should appear in the consolidated income statement for Pat Corporation and Subsidiaries for 2016 is:
a. $23,600
b. $21,200
c. $19,100
d. $14,200