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 Gross profit Miscellaneous revenues (losses) Depreciation expense Income tax expense Net Income $100,000 (30,000) (20,000) (20,000 $30,000 Seattle Multiple Choice $2,340 $1,260 $1,200 $2,700 $50,000 (20,000) (15,000) (6,000) $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?
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 Gross profit Miscellaneous revenues (losses) Depreciation expense Income tax expense Net Income $100,000 (30,000) (20,000) (20,000 $30,000 Seattle Multiple Choice $2,340 $1,260 $1,200 $2,700 $50,000 (20,000) (15,000) (6,000) $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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tt2.
Transcribed Image Text: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
$100,000
(30,000)
(20,000)
(20,000
$30,000
Gross profit
Miscellaneous revenues (losses)
Depreciation expense
Income tax expense
Net Income
Seattle
$50,000
(20,000)
(15,000)
(6,000)
$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
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