Gibson Corp. owned a 90% interest in Sparis Co. Sparis frequently made sales of inventory to Gibson. The sales, which include a markup over cost of 25%, were $420,000 in 2012 and $500,000 in 2013. At the end of each year, Gibson still owned 30% of the goods. Net income for Sparis was $912,000 during 2013. What was the non-controlling interest's share of Sparis' net income for 2013?
A) $85,680.
B) $90,600.
C) $90,720.
D) $91,680.
E) $91,800.

Question

Quizplus · Accepted Answer

Sub's Net Income $912,000 + Deferred Realized Gains ($420,000/1.25 × 30% × 25%) $25,200 - Deferred Unrealized Gains ($500,000/1.25 × 30% × 25%) $30,000 = $907,200 × Non-Controlling Interest 10% = $90,720 Non-Controlling Interest in Net Income