Question

Hand owns 90% of Finger. In 2017, Finger sold inventory (cost $70,000 )to Hand for $100,000....

Hand owns 90% of Finger. In 2017, Finger sold inventory (cost $70,000 )to Hand for $100,000. 40% of this inventory was not sold to third parties by Hand until 2018. In 2018, Finger sold inventory (cost $72,000) to Hand for $120,000. Of this inventory, $50,000 was not sold to third parties by Hand until 2019. In 2018, Finger reports $80,000 of net income. What is the noncontrolling interest in 2018 income of Finger?

Homework Answers

Answer #1

In given case Hand is the Parent company of Finger with 90% holding and rest 10% is the non controlling interest.

Finger has all the transactions with there parent company i.e. Hand. So if we required to prepare consolidated balance sheet then such type of transactions get eliminated with proper directives.

but we need to calculate the Income of Non controlling interest only.

*Finger reported $ 80,000 net income , So income of non controlling interest is 10% of $80,000= $8,000

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