Question

so let's say my dividends for a Subsidiary company ( north pole distributors) is 200,000 and Parent Company (S Claus corporation) owns 80%, shouldn't 20% of the 200,000 be equal to what I list on my dividends for the income to nci elimination entry? For example Income to NCI 8,000 NCI 32,000 Dividends 40,000 But my net income is 150,000 additional depreciation or amortization is (65,000), leaving me with 85,000, shouldn't this 85,000 be equal to what I have on my dividends?

Answer 1

Income attributable to NCI is separate from dividend to NCI.

Let say for example, Total income of the subsidiary company is $375000, additional depreciation is $25000, parent company hold 80% and NCI is 20%

Income of Subsidiary $375000

Less: Depreciation $25000

Adjusted income $350000

Parent's share $280000

NCI share $70000

Now, subsidiary Company distributed $50000 as dividend, thus $40000 (80%) to parent company and $10000(20%) to NCI.

Now, when we will calculate NCI share on the end of the year = NCI share at the beginning + Share of profit for the year - Dividend received

Suppose, NCI beginning balance is $970000,

NCI balance at the end of the year

NCI beginning balance $970000

Add: Income attributable to NCI $70000

Less: Dividend to NCI $10000

NCI ending balance $1,030,000