Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2010. During 2010, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of excess cost allocations totaled $60,000 in 2010.
-The noncontrolling interest's share of the earnings of Harbor Corp. is calculated to be
A) $132,000.
B) $150,000.
C) $168,000.
D) $160,000.
E) $0.

Question

Quizplus · Accepted Answer

The noncontrolling interest's share of the earnings is calculated as 30% of Harbor's net income after excess cost amortization. Harbor's net income is $500,000 ($2,500,000 - $2,000,000), and after subtracting the $60,000 amortization, it is $440,000. 30% of $440,000 is $132,000.

Femur Co Acquired 70% of the Voting Common Stock of Harbor