Hamandeggs Company owns a 60% interest in Hormel Company.The consolidated balance sheet of Hamandeggs Company, prepared at the beginning of the year, showed a minority interest of $30.The net income of Hamandeggs Company and Hormel Company were $80 and $10, respectively.The ending balance in the Minority Interest account is _____.
A)$30
B)$34
C)$36
D)$40

Question

Quizplus · Accepted Answer

The ending balance in the Minority Interest account is calculated by adding the minority share of Hormel's net income to the beginning balance. Since Hamandeggs owns 60% of Hormel, the minority interest is 40%. The minority share of Hormel's net income is 40% of $10 = $4. Adding this to the beginning balance of $30 gives an ending balance of $34.

Hamandeggs Company Owns a 60% Interest in Hormel Company