Determine the non-controlling interest net income

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Reference no: EM132806468

Question - JENNIE Company acquired 80% of the outstanding shares of MINNIE Company for $800,000 on January 1, 2019. On this date, MINNIE reports capital stock of $300,000, Share Premium of $350,000 and Retained Earnings of P200,000.

Moreover, an examination of MINNIE's net assets revealed that their book values were equal to their fair values except for Inventory which was understated by $50,000, Equipment with a 5-year remaining life was overstated by $75,000, Building with a 10-year life was understated by $100,000 and Land was understated by $20,000.

The non-controlling interest is stated at fair value. JENNIE Company pays $20,000 direct acquisition costs related to the acquisition and $15,000 indirect costs. $5,000 direct costs and $20,000 indirect costs however, remain unpaid.

If JENNIE and MINNIE Company are not small-medium enterprises and MINNIE Company reports Stockholders Equity of $1,200,000 on December 31, 2022.

Determine the non-controlling interest net income to be reported in 2019.

a) 20,500

b) 31,000

c) 21,500

d) 20,000

Reference no: EM132806468

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