Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, transfers inventory to Posito at a 25% gross profit rate. The following data are available pertaining
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, transfers inventory to Posito at a 25% gross profit rate. The following data are available pertaining specifically to Posito's intra-entity purchases from Gargiulo. Gargiulo was acquired on January 1, 2017.
2017 | 2018 | 2019 | |||||||
Purchases by Posito | $ | 8,000 | $ | 12,000 | $ | 15,000 | |||
Ending inventory on Posito's books | 1,200 | 4,000 | 3,000 | ||||||
Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends. | |||||||||
2017 | 2018 | 2019 | |||||||
Gargiulo's net income | $ | 70,000 | $ | 85,000 | $ | 94,000 | |||
Dividends paid by Gargiulo | 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 Gargiulo for 2018.
$8,570.
$7,580.
$8,500.
$8,400.
$8,430.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started