6) Pallet Corporation owns 80% of Adelt Corporation and Adelt owns 60% of Bajo Inc....
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6) Pallet Corporation owns 80% of Adelt Corporation and Adelt owns 60% of Bajo Inc. Which of the following is correct?
A) Bajo should not be consolidated because noncontrolling interests hold 52%.
B) Bajo should be consolidated because the 60% of Bajo stock is held in the affiliate structure.
C) Pallet has 8% indirect ownership of Bajo.
D) Pallet has 80% indirect ownership of Bajo.
7) Pabari Corporation owns an 80% interest in Alders Corporation and Alders owns a 60% interest in Babao Corporation. Both interests were acquired at a cost equal to book value equal to fair value. During 2013, Alders sells land to Babao at a profit of $12,000. Babao still holds the land at December 31, 2013 Net income(loss) of the three companies (excluding investment income) for 2013 are:
Pabari Corporation $180,000
Alders Corporation 72,000
Babao Corporation (30,000)
Controlling interest share of consolidated net income and noncontrolling interest share, respectively, for 2013 are
A) $211,200 and ($1,200).
B) $211,200 and ($3,600).
C) $213,600 and ($1,200).
D) $213,600 and ($3,600).
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