Son Company is a 90 percent-owned subsidiary of Pop Corporation, acquired several years ago at book value equal to fair value. For 2016 and 2017, Pop and Son report the following:
.....................................................................2016............... 2017
Pop's separate income (excludes income from Son)... $150,000........ $200,000
Son's Net Income ..............................................40,000........... 30,000
The only intercompany transaction between Pop and Son during 2016 and 2017 was the January 1, 2016, sale of land. The land had a book value of $10,000 and was sold intercompany for $15,000, its appraised value at the time of sale.
1. Assume that the land was sold by Pop to Son and that Son still owns the land at December 31, 2017.
a. Calculate controlling share of consolidated net income for 2016 and 2017.
b. Calculate noncontrolling interest share for 2016 and 2017.
2. Assume that the land was sold by Son to Pop and Pop still holds the land at December 31, 2017.
a. Calculate controlling share of consolidated net income for 2016 and 2017.
b. Calculate noncontrolling interest share for 2016 and 2017.