D:20 Required information Potter Company acquired 75 percent ownership of Snape Corporation in 20X5, at underlying book value. On that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Snape Corporation. Potter purchased inventory from Snape for $150,000 on July 24, 20X6, and resold 90 percent of the inventory to unaffiliated companies on November 11, 20X6, for $160,000. Snape produced the inventory sold to Potter for $120,000. The companies had no other transactions during 20X6. Based on the information given above, what amount of consolidated net income will be assigned to the controlling interest for 20X6? Multiple Choice $12,000 $25,000 $45,250 $52,000
D:20 Required information Potter Company acquired 75 percent ownership of Snape Corporation in 20X5, at underlying book value. On that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Snape Corporation. Potter purchased inventory from Snape for $150,000 on July 24, 20X6, and resold 90 percent of the inventory to unaffiliated companies on November 11, 20X6, for $160,000. Snape produced the inventory sold to Potter for $120,000. The companies had no other transactions during 20X6. Based on the information given above, what amount of consolidated net income will be assigned to the controlling interest for 20X6? Multiple Choice $12,000 $25,000 $45,250 $52,000
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 1BCRQ
Related questions
Question
![D:20
Required information
Potter Company acquired 75 percent ownership of Snape Corporation in 20X5, at underlying book
value. On that date, the fair value of the noncontrolling interest was equal to 25 percent of the book
value of Snape Corporation. Potter purchased inventory from Snape for $150,000 on July 24, 20X6,
and resold 90 percent of the inventory to unaffiliated companies on November 11, 20X6, for $160,000.
Snape produced the inventory sold to Potter for $120,000. The companies had no other transactions
during 20X6.
Based on the information given above, what amount of consolidated net income will be assigned to the controlling
interest for 20X6?
Multiple Choice
$12,000
$25,000
$45,250
$52,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73608469-638f-43df-91dd-f0645d8f825a%2F93e9b241-947c-45a3-991e-d3c5a6032aee%2Fn1rb19u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:D:20
Required information
Potter Company acquired 75 percent ownership of Snape Corporation in 20X5, at underlying book
value. On that date, the fair value of the noncontrolling interest was equal to 25 percent of the book
value of Snape Corporation. Potter purchased inventory from Snape for $150,000 on July 24, 20X6,
and resold 90 percent of the inventory to unaffiliated companies on November 11, 20X6, for $160,000.
Snape produced the inventory sold to Potter for $120,000. The companies had no other transactions
during 20X6.
Based on the information given above, what amount of consolidated net income will be assigned to the controlling
interest for 20X6?
Multiple Choice
$12,000
$25,000
$45,250
$52,000
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