REFERENCE: Ref.06_05 The Following Information Has Been Taken from the Consolidation Worksheet

Multiple Choice

REFERENCE: Ref.06_05
The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary,Stage Company.
(1. ) Graham reports a loss on sale of land of $5,000.The land cost Graham $20,000.
(2. ) Noncontrolling interest in Stage's net income was $30,000.
(3. ) Graham paid dividends of $15,000.
(4. ) Stage paid dividends of $10,000.
(5. ) Excess acquisition-date fair value over book value was expensed by $6,000.
(6. ) Consolidated accounts receivable decreased by $8,000.
(7. ) Consolidated accounts payable decreased by $7,000.
-How is the amount of excess acquisition-date fair value over book value recognized on a consolidated statement of cash flows assuming the indirect method is used?

A) It is ignored.
B) $6,000 subtracted from net income.
C) $4,800 subtracted from net income.
D) $6,000 added to net income.
E) $4,800 added to net income.