Question

X Company acquired an 80% stake in y Company on January 1, 2018, when the book value of y Company’s stockholder equity accounts was $400,000. All of the $250,000 excess fair value over book value was allocated to goodwill. There were no intra-entity transactions during the year, and y Company reported net income on its books for $160,000 for 2018. y Company also declared dividends of $40,000 in 2018. What is the noncontrolling interest ending balance in the December 31, 2018 consolidated balance sheet?

Answer 1

	Computation of non controlling interest
	Fair value at the time of acquisition
i	book value of y Company’s stockholder equity accounts		$      400,000
ii	goodwill on acquisition		$      250,000
iii=i+ii	Total		$      650,000
iv=iii*20%	Share of minority 20%		$      130,000
	Share in profit
v	y Company reported net income		$      160,000
vi	Less Dividend declared		$       (40,000)
vii=v+vi	Total		$      120,000
viii =vii*20%	Share of minority 20%		$         24,000
ix=viii+iv	Net noncontrolling interest ending balance		$      154,000