Reference no: EM133152200

Question - Edgar Co. acquired 60% of Stendall Co. on January 1, 2018. During 2018, Edgar made several sales of inventory to Stendall. The cost and sales price of the goods were $140,000 and $200,000, respectively.

Stendall still owned one-fourth of the goods at the end of 2018. Consolidated cost of goods sold for 2018 was $2,140,000 due to a consolidating adjustment for intra-entity transfers less intra-entity gross profit in Stendall's ending inventory.

How would net income attributable to the noncontrolling interest be different if the transfers had been for the same amount and cost, but from Stendall to Edgar?

A) Net income attributable to the noncontrolling interest would have increased by $20,000.

B) Net income attributable to the noncontrolling interest would have decreased by $18.000.

C) Net income attributable to the noncontrolling interest would have decreased by $6.000.

D) Net income attributable to the noncontrolling interest would have decreased by $56.000.

E) Net income attributable to the noncontrolling interest would have increased by $24,000.