On January 1, Year 5, Port Imports Inc. acquired 90% of the common shares of Spanish Imports Ltd. in exchange for a new issue of its own shares valued at $4,320. At that date the shareholders equity section of Spanish Imports Ltds balance sheet was as follows:

Preferred shares $ 500

Common shares 3,000

Retained earnings 1,600

Total shareholders equity $5,100

The preferred shares were cumulative and non-participating with a dividend rate of 8% per year and were redeemable at 104. Dividends had not been paid in Year 4. Any acquisition differential was allocated to goodwill. During Year 5, goodwill was tested and there was an impairment loss of $40.

During Year 5, Port Imports Ltd. had a net income of $2,200 and paid dividends of $620 and Spanish Imports Ltd. had a net income of $440 and paid dividends of $180. The only transaction between the two companies was the sale of a parcel of land from Spanish Imports to its parent company. The land was sold for $500 and had cost Spanish Imports $450 when originally purchased. The gain was taxable at the capital gains rate of 25%.

Required (hint: acquisitions differential = $260)

a) Calculate consolidated net income for year ending December 31, Year 5. You MUST show the net income attributable to the parent, NCI common and NCI preferred. Assume Port does not own any of the preferred shares of Spanish.

b) What is the amount of the non-controlling interest shown on the consolidated balance sheet of Portuguese Imports Inc, as at December 31, Year 5? For NCIs, show the calculations for common and preferred shareholders separately