Ace Company reports current earnings of $400,000 while paying $40,000 in cash dividends. Byrd Company earns $100,000 in net income and distributes $10,000 in dividends. Ace has held a 70 percent interest in Byrd for several years, an investment that it originally purchased at a price equal to the book value of the underlying net assets. Ace uses the cost method to account for these shares.

On January 1 of the current year, Ace acquired in the open market, Byrd bonds with a face value of $50,000 of a coupon interest rate of 8 percent. The $46,600 acquisition price provides Ace a 12 percent yield on its bond investment.

The bonds were originally issued by Byrd several years ago for 92, reflecting a 10 percent effective interest rate. On the date Ace acquired thee Byrd bonds, they had a book value of $48,300.

a) What is consolidated net income for the current year? Start with total report net income of P and S ($500,000) and make adjustments needed to get consolidated income.

b) What is the noncontrolling interest's share of consolidated net income?