Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Noncontrolling interest and intercompany sale of depreciable assets Assume on January 1, 2018, a parent company acquired a 75% interest in a subsidiary's voting
Noncontrolling interest and intercompany sale of depreciable assets Assume on January 1, 2018, a parent company acquired a 75% interest in a subsidiary's voting common stock. On the date of acquisition, the fair value of the subsidiary's net assets equaled their reported book values. On January 1, 2020, the subsidiary purchased a building for $345,600 The building has a useful life of 8 years and is depreciated on a straight-line basis with no salvage value. On January 1, 2022, the subsidiary sold the building to the parent for $288,000 The parent estimated that the building had a six-year remaining useful life and no salvage value. The parent also uses the straight-line method of amortization. For the year ending December 31, 2022, the parent's "stand-alone" income (i.e., net income before recording any adjustments related to preconsolidation investment accounting) is $360,000. The subsidiary's recorded net income is $72,000. Based on this information, determine the balance for Consolidated income attributable to noncontrolling interest: Select one: a. $12,000 b. $18,000 c. $10,800 d. $19,200
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started