Pinta Company acquired an 80% interest in Strummer Company on January 1, 2013, for $270,000 cash when Strummer Company had common stock of $150,000 and retained earnings of $150,000.All excess was attributable to plant assets with a 10-year life.Strummer Company made $30,000 in 2013 and paid no dividends.Pinta Company's separate income in 2013 was $375,000.Controlling interest in consolidated net income for 2013 is:
A)$405,000.
B)$399,000.
C)$396,000.
D)$375,000.

Question

Quizplus · Accepted Answer

The controlling interest in consolidated net income is $396,000. This is calculated by taking the sum of Pinta Company's separate income ($375,000) and 80% of Strummer Company's net income ($30,000 x 0.80 = $24,000).

Pinta Company Acquired an 80% Interest in Strummer Company on January