Controlling and Noncontrolling Interest Penn Company owns a 90% interest in Salvador Company and an 80% interest in Sencal Company. Profit remaining in ending inventories from intercompany sales for 2004 and 2005 is indicated below.
Intercompany Profit in Ending Inventory of: LO5 2004 2005 Selling Company Salvador Sencal Salvador Sencal Penn $8,000 $4,000 $5,000 $9,000 Salvador 6,000 10,000 Sencal 5,000 2,000 Salvador Company reported net income of $50,000 in 2004 and $45,000 in 2005, whereas Sencal Company’s net income was $60,000 and $75,000 in 2004 and 2005, respectively.
Penn Company’s net income from its own operations (including sales to affiliates) for 2004 and 2005 was $600,000 and $400,000, respectively.
Required:
A. Determine noncontrolling interest in combined income for 2004 and 2005.
B. Calculate the controlling interest in combined income for 2004 and 2005.