6) Pallet Corporation owns 80% of Adelt Corporation and Adelt owns 60% of Bajo Inc. Which of the following is correct?

A) Bajo should not be consolidated because noncontrolling interests hold 52%.

B) Bajo should be consolidated because the 60% of Bajo stock is held in the affiliate structure.

C) Pallet has 8% indirect ownership of Bajo.

D) Pallet has 80% indirect ownership of Bajo.

7) Pabari Corporation owns an 80% interest in Alders Corporation and Alders owns a 60% interest in Babao Corporation. Both interests were acquired at a cost equal to book value equal to fair value. During 2013, Alders sells land to Babao at a profit of $12,000. Babao still holds the land at December 31, 2013 Net income(loss) of the three companies (excluding investment income) for 2013 are:

Pabari Corporation $180,000

Alders Corporation 72,000

Babao Corporation (30,000)

Controlling interest share of consolidated net income and noncontrolling interest share, respectively, for 2013 are

A) $211,200 and ($1,200).

B) $211,200 and ($3,600).

C) $213,600 and ($1,200).

D) $213,600 and ($3,600).