Homework Answers
Answer a.) subsidiary’s income recognized by Uncle in 2018
| Amount ($) | |
| Consideration transferred by Uncle | $ 660,000 |
| Add: Non-Controlling Interest Fair Value | $ 165,000 |
| Total Fair Value - Nephew Company (total of Above) | $ 825,000 |
| Less: Book Value | $ 790,000 |
| Intangible Assets | $ 35,000 |
|
Amortization Expenses - Intangible Assets - $35,000 / 10 Years |
$ 3,500 |
| Net Income - Nephew Company - 2018 | $55,800 |
| Amortization Expenses - Intangible Assets | ($3,500) |
| Accrual Based Net Income | $52,300 |
| Uncle Company Share in Net Income of Nephew Company - 80% of $52,300 | $41480 |
Answer b) Non-Controlling Interest Share in Net Income
| Accrual Based Net Income - Nephew Company | $ 52,300 |
| Dividends Declared by Uncle Company to Nephew Company - $30,000 X 30% | $ 9,000 |
| Income to Outside Owners (total of above) | $ 61,300 |
|
Non-Controlling Interest Share in Consolidated Net Income
- $ 61,300 X 20% |
$ 12,260 |
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