(CH 4) Perry, Inc. owns a 80% interest in Brown Corp. During 2018, Brown sold $200,000...
- (CH 4) Perry, Inc. owns a 80% interest in Brown Corp. During 2018, Brown sold $200,000 in merchandise to Perry at a 25% gross profit. Twenty percent of the goods are unsold by Perry at year end. The non-controlling interest will receive what gross profit as a result of these sales?
|
a. |
$0 |
|
|
b. |
$8,000 |
|
|
c. |
$40,000 |
|
|
d. |
$50,000 |
I am having problems with calculations below I'm not sure if I am
on the right track or not.
|
|
Brown Sales to Perry |
Perry Sales of Merch to others |
Goods in ending inventory |
|
Sales |
$200,000 |
$160,000 |
$40,000 |
|
Gross profit percentage |
25% |
80% |
|
|
Gross profit realized |
|
_____________ |
|
|
NCI portion |
|
_________% |
|
|
NCI gross profit |
|
_____________ |
|
Homework Answers
Option B : $8,000.
Total outside sales of Perry = 80% of goods i.e., = $160,000.
Gross profit Realised = $160,000 * 25% = $40,000.
NCI Portion = 20%
NCI Share = $40,000 * 20% = $8,000.
Note : Please comment down for any further clarifications.
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