Question

1.Prater Inc. owned 85% of the voting common stock of Harkin Corp. During 2021, Prater made several sales of inventory to Harkin. The total selling price was $215,000 and the cost was $105,000. At the end of the year, 40% of the goods were still in Harkin’s inventory. Harkin’s reported net income was $400,000. Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what was the net income attributable to the noncontrolling interest in Harkin?

51000

53400

60000

66600

32250

2.Clark Corp. owned 75% of the voting common stock of Andrew Co. On January 3, 2020, Andrew sold a parcel of land to Clark. The land had a book value of $36,000 and was sold to Clark for $52,000. Andrew’s reported net income for 2020 was $123,000. Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what is net income attributable to the noncontrolling interest?

14750

26750

27750

30750

34750

Answer 1

1)	Hrkings net Income = $400000
	Non Controlling interest % = 100%- 85% =15%
	net income attributable to the noncontrolling interest in Harkin
	=$400000*15%
	=$60000
2)	Gain land sale = $52000-36000
	=$16000
	Non Controlling interest % = 100%-75% =25%
	net income attributable to the noncontrolling interest
	= (net income - gain on land) * % of NCI
	=($123000-16000)*25%
	=$26750