On January 1, 2009, Monica Company acquired 70 percent ofYoung Company’s outstanding com¬ mon stock for $665,000. The fair value of the noncontrolling interest at the acquisition date was $285,000. Young reported stockholders’ equity accounts on that date as follows: LO8 Common stock—$10 par value.. $300,000 Additional paid-incapita!.... 90,000 Retained earnings..... 410,000 In establishing the purchase price, Monica appraised Young’s assets and ascertained that the accounting records undervalued a building (with a five-year life) by $50,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years.

During the subsequent years, Young sold Monica inventory at a 30 percent markup on the trans¬ fer price. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following:

Inventory Remaining at Year-End Year Transfer Price

(at transfer price)

2009

$60,000

$10,000 2010 80,000 12,000 2011 90,000 18,000 In addition, Monica sold Young several pieces of fully depreciated equipment on January 1, 2010, for $36,000. The equipment had originally cost Monica $50,000. Young plans to depreciate these assets over a six-year period.

In 2011, Young earns a net income of $ 160,000 and distributes $50,000 in cash dividends. These figures increase the subsidiary’s Retained Earnings to a $740,000 balance at the end of 2011. Dur¬ ing this same year, Monica reported dividend income of $35,000 and an investment account con¬ taining the initial value balance of $665,000.

Prepare the 2011 consolidation worksheet entries for Monica and Young. In addition, compute the noncontrolling interest’s share of the subsidiary’s net income for 2011.