Calculate investment in Allie balance

Assignment Help Accounting Basics

Reference no: EM132741249

Question - Choco Co. acquired 90% of Allie Co. (Allie has total of 100,000 shares outstanding and Choco acquired 90,000 shares) for $810,000 ($9/share) on December 31, 2018. The market value of Allie's stock was $9/share. Choco uses equity method to report its investment in Allie.

12/31/2018. Choco Co. Allie Co. BV BV FV

Current assets $1,368,000 $238,000 $238,000

Equipment [8 years] 164,000 280,000 $360,000

Buildings [20 years] 274,000 210,000 $270,000

Liabilities $(546,000) $(168,000) $(168,000)

Common stock (300,000) (150,000)

Additional paid in capital. (460,000) (350,000)

Retained earnings [12/31/18] (500,000) (60,000)

During 2019, Allie earned net income of $180,000 and paid dividends of $22,000.

Required -

1. Calculate "investment in Allie" balance on 12/31/2019.

2. Calculate "equity in Allie's income" balance on 12/31/2019.

3. Choco's net income only from its own operation (excluding 90% of Allies ownership as "Equity in Allie's income") in 2019 was $580,000. What is consolidated net income for 2019 attributable to Choco's controlling interest (i.e., NI:Choco in consolidated income statement)?

4. What is the noncontrolling interest (NCI)'s share of the Allie's net income for the year ended December 31, 2019 (i.e., i.e., NI:NCI in consolidated income statement)?

5. What is the beginning balance of the noncontrolling interest (NCI) in the Allie at December 31, 2019 (i.e., NCI in Cake 1/1)?

6. What is the ending balance of the noncontrolling interest (NCI) in the Allie at December 31, 2019 (i.e., NCI in Cake 12/31)?

Reference no: EM132741249

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