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What is its portion in the consolidated net income for year

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Reference no: EM132958185

LNET purchased 70% of the 10,000 outstanding shares MNET had on Jan 1, 2019 for $315,000 cash. On that day, MNET had 10,000 preferred shares, 5% cumulative, redeemable at a price which is $1 higher than the cost, and dividends were two years in arrears. LNET did not own any of those preferred shares. Both companies have Dec. 31 as the reporting day.

MNET reported the followings:

Common shares: $160,000 on Jan 1, 2019

Preferred shares: $50,000 on Jan 1, 2019

Retained earnings: $70,000 on Jan 1, 2019

Net income: $60,000 for 2019

Dividends declared: $5,000 in 2019

Problem 1: What is the carrying value of the net assets used to calculate total acquisition differential on Jan 1. 2019?

Problem 2: What is the NCI in profit that should be reported on the consolidated income statement for year 2019?

Problem 3: What is NCI reported on the consolidated balance sheet as of Dec 31, 2019?

Problem 4: If LNET reported $120,000 net income for 2019, what is its portion in the consolidated net income for the year?

Reference no: EM132958185

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