Hardford Corp. held 80% of Inglestone Inc., which, in turn, owned 80% of Jade Co

Question

Hardford Corp. held 80% of Inglestone Inc., which, in turn, owned 80% of Jade Co. Excess amortization expense was not required by any of these acquisitions. Separate net income figures (without investment income) as well as upstream intra-entity gross profits (before deferral) included in the income for the current year follow:

The net income attributable to the noncontrolling interest of Jade Co. is calculated to be

Hardford Corp. Inglestone Corp. Jade Inc. Separate net income $560,000 $420,000 $280,000 Intra-entity gross profits 70,000 42,000 84,000

Explanation / Answer

Non-Controlling Interest Income = ($280,000 - $84,000) × 20%

Non-Controlling Interest Income = $39,200

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