On January 1, 2013, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong's stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill which has not been impaired.
As of December 31, 2013, before preparing the consolidated worksheet, the financial statements appeared as follows:
During 2013, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of this purchase had been paid for by Strong by the end of the year. 60% of these goods were still in the company's possession on December 31, 2013.
What is the consolidated total of non-controlling interest appearing in the balance sheet?
A) $100,800.
B) $97,440.
C) $93,800.
D) $120,400.
E) $117,040.

Question

On January 1, 2013, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong's stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill which has not been impaired.
As of December 31, 2013, before preparing the consolidated worksheet, the financial statements appeared as follows: 
During 2013, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of this purchase had been paid for by Strong by the end of the year. 60% of these goods were still in the company's possession on December 31, 2013.
What is the consolidated total of non-controlling interest appearing in the balance sheet?
A) $100,800. 
B) $97,440. 
C) $93,800. 
D) $120,400. 
E) $117,040.

Quizplus · Accepted Answer

[$364,000/80% = $455,000 + Net Income ($154,000 - $7,000) $147,000] $602,000 × .20 = $120,400