Question
Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 30% gross profit rate. The following data are available pertaining
Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 30% gross profit rate. The following data are available pertaining specifically to Philbins intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020.
2020 | 2021 | 2022 | |||||||
Purchases by Philbin | $ | 8,000 | $ | 12,000 | $ | 15,000 | |||
Ending inventory on Philbins books | 3,000 | 7,000 | 3,000 | ||||||
Assume the equity method is used. The following data are available pertaining to Andersons income and dividends.
2020 | 2021 | 2022 | |||||||
Andersons net income | $ | 70,000 | $ | 80,000 | $ | 94,000 | |||
Dividends paid by Anderson | 10,000 | 10,000 | 15,000 | ||||||
Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute the net income attributable to the noncontrolling interest of Anderson for 2021.
Select one:
a. $8,570.
b. $7,880.
c. $8,430.
d. $8,000.
e. $7,400.
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