Son Corporation, an 80 percent-owned subsidiary of Pin Corporation, sold equipment with a book value of $300,000 to Pin for $500,000 at December 31, 2011. Separate income tax returns are filed, and a 34 percent income tax rate is applicable to both Pin and Son.
REQUIRED
1. Prepare a one-line consolidation entry for Pin to eliminate the effect of the intercompany transaction.
2. Prepare workpaper entries in general journal form to eliminate the unrealized profit.
3. Assume that the reported net income of Son is $1,600,000 and that the sale of equipment is the only intercompany transaction between Pin and Son. What is the noncontrolling interest's share of total consolidated income?