T-Account Calculation of Controlling Interest in Combined Net Income On January 1, 2004, P Company purchased an 80% interest in S Company for $600,000, at which time S Company had retained earnings of $300,000 and capital stock of $350,000. Any difference between cost and book value was entirely attributable to a patent with a remaining useful life of 10 years.
Assume that P and S Companies reported net incomes from their independent operations of $200,000 and $100,000, respectively. LO2 Required:
Prepare a t-account calculation of the controlling interest in combined net income for the year ended December 31, 2004.