On January 1, 2009, Uncle Company purchased 80 percent of Nephew Companys capital stock for $500,000 in
Question:
Operational income figures (including no investment income) for these two companies follow. In addition, Uncle pays $20,000 in dividends to shareholders each year and Nephew distributes $5,000 annually. Any excess fair-value allocations are amortized over a 10-year period.
a. Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiarys income recognized by Uncle in 2011?
b. What is the noncontrolling interests share of the subsidiarys 2011income?
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Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
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