Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $440,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year.

Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $340,000. Scenic reported net income of $150,000. Placid Lake declared $140,000 in dividends during this period; Scenic paid $44,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows:

	Placid Lake			Scenic
Inventory	$	180,000		$	94,000
Land		640,000			240,000
Equipment (net)		440,000			340,000

During 2017, intra-entity sales of $95,000 (original cost of $50,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $130,000 in intra-entity sales were made with an original cost of $63,000. Of this merchandise, 20 percent had not been resold to outside parties by the end of the year.

Question? For 2018, what is the noncontrolling interests share of Scenics net income?

Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2017, Scenic sold equipment (that originally cost $140,000 but had a $64,000 book value on that date) to Placid Lake for $88,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2018, consolidation of these two companies to eliminate the impact of the intra-entity transfer? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Question?

• What are the Retained Earnings and Accumulated Depreciation below?

Transaction	Accounts	Debit	Credit
1	Equipment	52,000
	Retained earnings - Scenic
	Accumulated depreciation