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On January 1, Year 6, AB Inc
On January 1, Year 6, AB Inc. purchased 80 percent of the common shares of CD Corp. for $1,400,000. On the date of acquisition, CD's shareholders' equity was as follows:
Common shares $600,000
Retained earnings $608,000
Any acquisition differential was allocated to goodwill. During Year 6, CD earned a net income of $400,000 and paid dividends of $300,000. On December 31, Year 6, a goodwill impairment loss of $30,000 was recorded.
What is consolidated net income attributable to the non-controlling interest on the consolidated income statement for the year ended December 31, Year 6?
Choose correct answer
- $20,000
- $60,000
- $74,000
- $80,000
Expert Solution
Computation of Consolidated Net Income attributable to the non-controlling interest on the consolidated income statement for the year ended December 31, Year 6:
Purchased 80 percent of the common shares of CD Corp.
Net Income of $400,000*80% = $320,000
Consolidated Net Income = $400,000-$320,000 = $80,000
So, the correct option is 4th "$80,000".
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