Bauerly Co

Multiple Choice

Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2010, Devin made frequent sales of inventory to Bauerly. There were unrealized gains of $40,000 in the beginning inventory, and $25,000 at the end of the year. Devin reported net income of $137,000 for 2010. Bauerly decided to use the equity method to account for the investment. What is the noncontrolling interest's share of Devin's net income for 2010?

A) $41,100.
B) $33,600.
C) $21,600.
D) $45,600.
E) $36,600.