Pit Corporation acquired a 90 percent interest in Sad on July 1, 2012, for $675,000. The stockholders’ equity of Sad at December 31, 2011, was as follows (in thousands):

Capital stock                            $500

Retained earnings                    200

Total                                         $700

During 2012 and 2013, Sad reported income and declared dividends as follows:

On July 1, 2013, Pit sold a 10 percent interest (or one-ninth of its investment) in Sad for $85,000.

REQUIRED

1. Determine Pit’s investment income for 2012 and 2013, and its investment balance on December 31, 2012 and 2013.

2. Determine noncontrolling interest share for 2012 and 2013, and the total of noncontrolling interest on December 31, 2012 and 2013.

Transcribed Image Text:

2012 2013 Net income Dividends (December) $100,000 50,000 $80,000 30,000