Phelps, Inc. owns 85 percent of Satellite Corporation's voting stock. The acquisition price exceeded book and fair

Question:

Phelps, Inc. owns 85 percent of Satellite Corporation's voting stock. The acquisition price exceeded book and fair value by $80,000 and was appropriately attributed to goodwill. Satellite holds 20 percent of Phelps's voting stock. The price paid for the shares by Satellite equaled 20 percent of the parent's book value and net fair values of its assets and liabilities.
During the current year, Phelps reported operating income of $160,000 and income from Satellite of $27,000. At the same time, Satellite reported operating income of $50,000 and income from Phelps of $14,000.
What is the non-controlling interest in Satellite's net income under the treasury stock approach?
a. $31,500.
b. $29,400.
c. $9,600.
d. $7,500.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...