1)Petunia Company acquired an 80% interest in Shaman Company in 2016. In 2017 and 2018, Shaman reported net income of $400,000 and $480,000, respectively. During 2017, Shaman sold $80,000 of merchandise to Petunia for a $20,000 profit. Petunia sold the merchandise to outsiders during 2018 for $140,000. For consolidation purposes, what is the noncontrolling interests share of Shaman's 2017 and 2018 net income?

a) $90,000 and $96,000.

b) $100,000 and $76,000.

c) $84,000 and $92,000.

d) $76,000 and $100,000.

2)P Company regularly sells merchandise to its 80%-owned subsidiary, S Corporation. In 2016, P sold merchandise that cost $240,000 to S for $300,000. Half of this merchandise remained in Ss December 31, 2016 inventory. During 2017, P sold merchandise that cost $375,000 to S for $468,000. Forty percent of this merchandise inventory remained in Ss December 31, 2017 inventory. Selected income statement information for the two affiliates for the year 2017 is as follows:

P S

Sales Revenue $2,250,000 $1,125,000

Cost of Goods Sold 1,800,000 937,500

Gross profit $450,000 $187,500

Consolidated cost of goods sold for P Company and Subsidiary for 2017 are:

a) $2,260,500.

b) $2,268,000.

c) $2,276,700.

d) $2,737,500.

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