Question

ngela, Inc., holds a 90 percent interest in Corby Company. During 2017, Corby sold inventory costing $118,500 to Angela for $158,000. Of this inventory, $42,000 worth was not sold to outsiders until 2018. During 2018, Corby sold inventory costing $108,550 to Angela for $167,000. A total of $54,600 of this inventory was not sold to outsiders until 2019. In 2018, Angela reported separate net income of $158,000 while Corby's net income was $128,500 after excess amortizations. What is the noncontrolling interest in the 2018 income of the subsidiary?

Answer 1

	Unrealized Gross Profit for the year ended 2017
	Ending Inventory	$42,000
	Gross Profit($158,000 - $118,500)	$39,500
	Gross Profit Rate($39,500/$158,000)	25%
	Unrealized intra-entity gross profit($42,000*25%)	$10,500
	Unrealized Gross Profit for the year ended 2018
	Ending Inventory	$54,600
	Gross Profit($167,000 - $108,550)	$58,450
	Gross Profit Rate($58,450/$167,000)	35%
	Unrealized intra-entity gross profit($54,600*35%)	$19,110
	Net Income attributable to Non controlling interest
	Reported Net income for 2018	$128,500
Add:	Realized Gross profit deferred in 2017	$10,500
Less:	Realized Gross profit deferred in 2018	($19,110)
	Realized Net income of subsidiary	$119,890
	Outside ownership	10%
	Non-Controlling interest	$11,989