Non-controlling interest share of consolidated net income

Question

Question 1. On January 1, 2009, Race Corp. acquired 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 non-controlling interest's share of consolidated net income?

• $37,200
• $22,800
• $30,900
• $32,900
• $40,800

Question 2. Where do dividends paid by a subsidiary to the parent company appear on a consolidated statement of cash flows? (

• Cash flows from operating activities
• Cash flows from investing activities
• Cash flows from financing activities
• Supplemental schedule of non-cash investing and financing activities
• They do not appear on the consolidated statement of cash flows

Question 3. Keenan Company has had bonds payable of $20,000 outstanding for several years. On January 1, 2009, when there was an unamortized premium of $2,000 with a remaining life of 10 years, Keenan's parent, Ross, Inc., purchased the bonds in the open market for $19,000. Keenan is a 90% owned subsidiary of Ross. The bonds pay 8% interest annually on December 31. The companies use the straight-line method to amortize interest revenue and expense. Compute the consolidated gain or loss on a consolidated income statement for 2009.

• $3,000 gain
• $3,000 loss
• $1,000 gain
• $1,000 loss
• $2,000 gain

Question 4. Using the indirect method, where does the decrease in accounts receivable appear on a consolidated statement of cash flows?

• $8,000 increase to net income as an operating activity
• $8,000 decrease to net income as an operating activity
• $6,400 increase to net income as an operating activity
• $6,400 decrease to net income as an operating activity
• $8,000 increase as an investing activity

Question 5. Stevens Company has had bonds payable of $10,000 outstanding for several years. On January 1, 2009, when there was an unamortized discount of $2,000 and a remaining life of 5 years. Its 80% owned subsidiary, Matthews Company, purchased the bonds in the open market for $11,000. The bonds pay 6% interest annually on December 31. The companies use the straight-line method to amortize interest revenue and expense. Compute the consolidated gain or loss on a consolidated income statement for 2009.

• $1,000 gain
• $1,000 loss
• $2,000 loss
• $3,000 loss
• $3,000 gain