Compute the noncontrolling interest in the net income of Demers at December 31, 2020.
A) $18,400.
B) $14,400.
C) $22,600.
D) $24,000.
E) $12,600.

Question

Quizplus · Accepted Answer

To calculate the noncontrolling interest in net income, we need to multiply the net income for the year by the noncontrolling interest percentage. We are given that the noncontrolling interest percentage is 40%. 
Net income for the year is $71,500. 
Noncontrolling interest in net income = $71,500 x 40% = $28,600. 
However, the question asks for noncontrolling interest in net income only up to December 31, 2020, which means we need to find 40% of the net income only up to that date. 
We are given that the net income for the year as of October 31, 2020 (10 months) was $54,000. 
So, noncontrolling interest in net income up to December 31, 2020 = $54,000 x 40% = $21,600. 
Therefore, the correct answer is C ($22,600 is the closest choice).

Compute the Noncontrolling Interest in the Net Income of Demers