Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit
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Question:
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2010.
| 2010 | 2011 | 2012 | |
|---|---|---|---|
| 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.
| 2010 | 2011 | 2012 | |
|---|---|---|---|
| Garguilo's Net Income | $70,000 | $85,000 | $94,000 |
| Dividends paid by Gargiulo | 10,000 | 10,000 | 15,000 |
Compute the non-controlling interest in Gargiulo's net income for 2012.
A. $9,400.
B. $9,375.
C. $9,425.
D. $9,325.
E. $8,485.
Expert Answer:
Related Book For 
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
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