Reference no: EM132520107

Question - The Parent acquired 7,000 shares for control at a price of $15 of 10,000 shares the Sub had on Jan 1, 2017. On Jan 1, 2018, it sold 1,000 shares at a price of $18. The Sub reported net incomes of $40,000 and $60, 000 for 2017 and 2018, respectively, and declared dividends of $3,000 for both years. On the acquisition date, PPE with an average useful life of 10 years was undervalued by $$10,000, and bank loan with a useful life of 5 years was overvalued by $4,000.

Required -

1) Assuming the entity theory, what is NCI in value as of Dec. 31, 2017?

2) What is the balance of the Parent's investment account under the equity method as of Dec.31, 2018?