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Pitstick Co. reported current earnings of $580,000 while paying $58,000 in cash dividends. Lane Co. earned $150,000 in net income and distributed $15,000 in dividends Pitstick held a 75% interest in Lane for several years, an investment that it originally acquired by transferring consideration equal to the book value of the underlying net assets. Pitstick used the initial value method to account for these shares.On January 1, 2021, Lane acquired in the open market $75,000 of Pitstick's 8% bonds. The bonds had originally been issued several years ago at a price that would yield a 10% effective interest rate. On the date of the bond purchase, the book value of the bonds payable was $68,200. Lane paid $66,000 based on a 12% effective interest rate over the remaining life of the bonds. What is the noncontrolling interest's share of the subsidiary's net income? A) $33,750. B) $35,250. C) $36.950. D) $37,500. D) $39,750. O a, E Ob. D OC C O d. A Oe B

Pitstick Co. reported current earnings of $580,000 while paying $58,000 in cash dividends. Lane Co. earned $150,000 in net income and distributed $15,000 in dividends Pitstick held a 75% interest in Lane for several years, an investment that it originally acquired by transferring consideration equal to the book value of the underlying net assets. Pitstick used the initial value method to account for these shares.On January 1, 2021, Lane acquired in the open market $75,000 of Pitstick's 8% bonds. The bonds had originally been issued several years ago at a price that would yield a 10% effective interest rate. On the date of the bond purchase, the book value of the bonds payable was $68,200. Lane paid $66,000 based on a 12% effective interest rate over the remaining life of the bonds. What is the noncontrolling interest's share of the subsidiary's net income? A) $33,750. B) $35,250. C) $36.950. D) $37,500. D) $39,750. O a, E Ob. D OC C O d. A Oe B

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pitstick Co. reported current earnings of $580,000 while paying $58,000 in cash dividends. Lane Co. earned $150,000 in net income and distributed $15,000 in dividends Pitstick held a 75% interest in Lane for several years, an investment that it originally acquired by transferring consideration equal to the book value of the underlying net assets. Pitstick used the initial value method to account for these shares. On January 1, 2021, Lane acquired in the open market $75,000 of Pitstick's 8% bonds. The bonds had originally been issued several years ago at a price that would yield a 10% effective interest rate. On the date of the bond purchase, the book value of the bonds payable was $68,200. Lane paid $66,000 based on a 12% effective interest rate over the remaining life of the bonds.What is the noncontrolling interest's share of the subsidiary's net income? A) $33,750. B) $35,250. C) $36.950. D) $37,500. E) $39,750. O a. E O b. D OC C O d. A Oe B
Transcribed Image Text:Pitstick Co. reported current earnings of $580,000 while paying $58,000 in cash dividends. Lane Co. earned $150,000 in net income and distributed $15,000 in dividends Pitstick held a 75% interest in Lane for several years, an investment that it originally acquired by transferring consideration equal to the book value of the underlying net assets. Pitstick used the initial value method to account for these shares. On January 1, 2021, Lane acquired in the open market $75,000 of Pitstick's 8% bonds. The bonds had originally been issued several years ago at a price that would yield a 10% effective interest rate. On the date of the bond purchase, the book value of the bonds payable was $68,200. Lane paid $66,000 based on a 12% effective interest rate over the remaining life of the bonds.What is the noncontrolling interest's share of the subsidiary's net income? A) $33,750. B) $35,250. C) $36.950. D) $37,500. E) $39,750. O a. E O b. D OC C O d. A Oe B
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