8) How is noncontrolling interest income calculated? A) Consolidated net income

Question

8) How is noncontrolling interest income calculated? A) Consolidated net income x NCI percentage ownership B) [Consolidated net income adjusted for excess acquisition-date fair value amortization] x NCI percentage ownership amortization] x NCI percentage ownership amortization less subsidiary dividends] x NCI percentage ownership C) Subsidiary net income x NCI percentage ownership D) [Subsidiary net income adjusted for excess acquisition-date fair value E) [Subsidiary net income adjusted for excess acquisition-date fair value 9) On January 1, 2017 Parent Company owned 8,000 out of the 10,000 shares Co. reports net income of $100,000 in 2017, what amount of income will Parent outstanding of Kid Co. On July 1, 2017 Parent Company sold 2,000 of its shares. If Kid Company accrue for their investment in Kid Co. if Parent uses the equity method? Assume Kid Co. earns the income evenly over the year A) $40,000 B) $60,000 C) $70,000 D) $80,000 E) $100,000 10) During the year Lisa Company had a 15% investment in Ali Inc. The fair value of Lisa's investment increased by $2,000. Ali reported income of $10,000 for the year. How much would Lisa's investment in Ali increase? A) $1,500 B) $2,000 C) $10,000 D) $300 E) $0 11) Tokhie Co. acquired all the outstanding common shares of Cohen Co. for cash. The carrying amounts of Cohen's assets and liabilities approximated their fair values at the acquisition date, except that the carrying amount of its building was more than fair value. In preparing Tokhie year-end consolidated income statement, what is the consolidated effect of recording the additional amortization on the building, and should goodwill amortization be recognized? Goodwill Amortization A) B) C) D) Depreciation Expense Lower Higher Lower Higher No No Yes Yes

Explanation / Answer

Answer to question no.8
Option C is the correct answer.

Subsidiary net income X NCI Percentage ownership

As share of non controlling interest is calculated from the income of subsidiary.

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