Pomery Company has a financial relationship with Styro Inc., a separate legal entity, but does not own

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Question:

Pomery Company has a financial relationship with Styro Inc., a separate legal entity, but does not own any of Styro's voting stock. On January 1, 2021, Pomery determines that Styro is a variable interest entity and that Pomery is Styro's prime beneficiary. Sparkle's shareholders' equity on January 1, 2021 is as follows:

Capital stock	$ 2,000
Retained earnings	7,000
Total	$9,000

Styro's net assets are reported at values approximating fair value, except that its equipment (5-year life, straight-line) is overvalued by $3,000 and it has previously unreported indefinite life identifiable intangibles valued at $4,000. The fair value of Styro at January 1, 2021 is $15,000. Pomery and Styro were not under common control prior to January 1, 2021.

Styro reported net income of $800 in 2021, and identifiable intangibles were impaired by $200. Styro reported net income of $650 in 2022, and identifiable intangibles were not impaired. Goodwill was not impaired in either year.

Noncontrolling interest, reported on the December 31, 2021 consolidated balance sheet, is