question 1:

24) P Company owns an 80% interest in S Company.During 2017, S sells merchandise to P for $150,000 at a profit of $30,000.On December 31, 2017, 50% of this merchandise is included in P's inventory.Income statements for P and S are summarized below:

P

S

Sales

$900,000

$450,000

Cost of Sales

(450,000)

(300,000)

Operating Expenses

(225,000)

(60,000)

Net Income (2017)

$225,000

$90,000

Controlling interest in consolidated net income for 2017 is:

a) $225,000.

b) $285,000.

c) $297,000.

d) $315,000.

Answer: b

........................................................

question 2:

25) P Company owns an 80% interest in S Company.During 2017, S sells merchandise to P for $150,000 at a profit of $30,000.On December 31, 2017, 50% of this merchandise is included in P's inventory.Income statements for P and S are summarized below:

P

S

Sales

$900,000

$450,000

Cost of Sales

(450,000)

(300,000)

Operating Expenses

(225,000)

(60,000)

Net Income (2017)

$225,000

$90,000

Noncontrolling interest in income for 2017 is:

a) $3,000.

b) $14,400.

c) $15,000.

d) $18,000.

Answer: c