On January 1, 2016, Uncle Company purchased 80 percent of Nephew Company's capital stock for $500,000 in
Question:
Separate operating income figures (not including investment income) for these two companies follow. In addition, Uncle declares and 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.
________________________Uncle ___________ Nephew
Year__________________ Company _________ Company
2016 .......................... $ 90,000 ............. $30,000
2017 .......................... 120,000 ............. 40,000
2018 .......................... 140,000 ............. 50,000
a. Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary's income recognized by Uncle in 2018?
b. What is the net income attributable to the noncontrolling interest for 2018?
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Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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