Question: Company P purchases an 80 interest in Company S on
Company P purchases an 80% interest in Company S on January 1, 2011, for $480,000. Company S had equity of $450,000 on that date. Any excess of cost over book value was attributed to equipment with a 10-year life. On July 1, 2016, Company P purchased another 10% interest for $160,000. Company S’s equity was $550,000 on January 1, 2016, and it earned $50,000 evenly during 2016. Company P had internally generated net income of $120,000 during 2016. Calculate consoli0dated income for 2016 and the distribution of consolidated income to the non-controlling and controlling interests.
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