If Smith's net income is $100,000 in the year following the acquisition,
A) The portion allocated to the common stock (residual amount) is $92,800.
B) $10,800 preferred stock dividend will be subtracted from net income attributed to common stock in arriving at noncontrolling interest in consolidated income.
C) The noncontrolling interest in consolidated net income is $27,200.
D) The preferred stock dividend will be ignored in noncontrolling interest in consolidated net income because Nichols owns the noncontrolling interest of preferred stock.
E) The noncontrolling interest in consolidated net income is $30,800.

Question

Quizplus · Accepted Answer

The noncontrolling interest in consolidated net income is calculated based on the percentage of the subsidiary not owned by the parent company. If Smith's net income is $100,000, and assuming the noncontrolling interest is 27.2%, the noncontrolling interest in consolidated net income would be $27,200.

If Smith's Net Income Is $100,000 in the Year Following