Race decided to use the equity method to account for this, Ask an Expert

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On January 1, 2006, Race Corp. purchased 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at year-end. Gallow's reported net income was $204,000, and Race's net income was $806,000. Race decided to use the equity method to account for this investment. What was the noncontrolling interest's share of consolidated net income?

a) $37,200

b) $22,800

c) $30,900

d) $40,800

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M974618

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