Portland Inc. (Portland) owns 80% of Seattle Inc. (Seattle) and uses the cost method to account for its investment. The 2023 income statements of both companies are shown below. Portland Seattle Gross profit $100,000 $50,000 Miscellaneous revenues (losses) (30,000) (20,000) Depreciation expense (20,000) (15,000) Income tax expense (20,000 (6,000) Net Income $30,000 $9,000 On January 1, 2023, Seattle acquired equipment for $7,000 and sold it the same day to Portland for $12,000. The equipment had a remaining useful life of 10 years on that date. Both companies are subject to an effective tax rate of 40%. Which of the following is the correct amount of consolidated net income attributable to the noncontrolling interest in Portland's 2023 consolidated income statement? Multiple Choice $2,340 $1,260 $1,200 $2,700
Portland Inc. (Portland) owns 80% of Seattle Inc. (Seattle) and uses the cost method to account for its investment. The 2023 income statements of both companies are shown below.
Portland Seattle
Gross profit $100,000 $50,000
Miscellaneous revenues (losses) (30,000) (20,000)
Income tax expense (20,000 (6,000)
Net Income $30,000 $9,000
On January 1, 2023, Seattle acquired equipment for $7,000 and sold it the same day to Portland for $12,000. The equipment had a remaining useful life of 10 years on that date. Both companies are subject to an effective tax rate of 40%.
Which of the following is the correct amount of consolidated net income attributable to the noncontrolling interest in Portland's 2023 consolidated income statement?
Multiple Choice
$2,340
$1,260
$1,200
$2,700
Step by step
Solved in 3 steps
