The following is a summary of transactions that took place between Parent company and Subsidiary Company. Parent
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The following is a summary of transactions that took place between Parent company and Subsidiary Company.
- Parent had owned 80% of the common shares of Subsidiary since 20X1.
- In 20X4 Parent sold inventory to subsidiary. The cost of the items sold was $80,000 while the selling price was $110,000. Only 30% of the items were sold to third parties in 20X4. The remainder was sold out by the subsidiary evenly in 20X5 and 20X6.
- Early January 20X5, the subsidiary sold a machine to the parent company at a gain of $25,000.
- Both companies use the straight line method for calculating depreciation.
- Both companies have estimated the remaining useful life for the machine to be 5 years.
- The following table shows the separate income for each company over the last three years:
Year | Parent | Subsidiary |
20X4 | $450,000 | $150,000 |
20X5 | $500,000 | $250,000 |
20X6 | $520,000 | $270,000 |
what will the NCI’s share in income for the year 20X4 ?
Related Book For
Introduction to Statistical Investigations
ISBN: 978-1118922002
1st edition
Authors: Beth L.Chance, George W.Cobb, Allan J.Rossman Nathan Tintle, Todd Swanson Soma Roy
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