Reference no: EM132681809

Question - On January 1, 2013, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities. Inventory, which was sold in the third quarter, is undervalued $5,000. Land is undervalued $20,000. Buildings and equipment have a fair value which exceeds book value by $30,000, and a 6-year expected life. Bonds payable are overvalued $10,000. The remaining excess, if any, is due to goodwill. Subsidiary had net income of $100,000 and paid $500 in dividends during 2013. Parent had net income of $50,000 and paid $1,000 in dividends during 2013. Assume that Parent uses equity method to record its investment.

Required -

(1) Provide all eliminations as of December 31, 2019.

(2) Calculate how much consolidated net income belongs to NCI.