On January 1, 2010, Jones Company bought 15% of Whitton Company. Jones paid $150,000 for these shares, an amount that exactly equaled the proportionate book value of Whitton. On January 1, 2011, Whitton acquired 80% ownership of Jones. The following data are available concerning Whitton's acquisition of Jones:
Consideration transferred for 80% interest, January 1, 2011: $800,000
Jones' reported book value, January 1, 2011: 900,000
Excess fair value over book value (assigned to trademarks) is amortized over 20 years.
The initial value method is used by both companies.
The following information is available regarding Jones and Whitton:
-Compute the noncontrolling interest in net income for 2011.
A) $11,000.
B) $10,800.
C) $9,000.
D) $8,200.
E) $7,200.

Question

On January 1, 2010, Jones Company bought 15% of Whitton Company. Jones paid $150,000 for these shares, an amount that exactly equaled the proportionate book value of Whitton. On January 1, 2011, Whitton acquired 80% ownership of Jones. The following data are available concerning Whitton's acquisition of Jones:
Consideration transferred for 80% interest, January 1, 2011: $800,000
Jones' reported book value, January 1, 2011: 900,000
Excess fair value over book value (assigned to trademarks) is amortized over 20 years.
The initial value method is used by both companies.
The following information is available regarding Jones and Whitton: 
-Compute the noncontrolling interest in net income for 2011.
A) $11,000. 
B) $10,800. 
C) $9,000. 
D) $8,200. 
E) $7,200.

Quizplus · Accepted Answer

The Answer of On January 1, 2010, Jones Company bought 15% of Whitton Company. Jones paid $150,000 for these shares, an amount that exactly equaled the proportionate book value of Whitton. On January 1, 2011, Whitton acquired 80% ownership of Jones. The following data are available concerning Whitton's acquisition of Jones:
Consideration transferred for 80% interest, January 1, 2011: $800,000
Jones' reported book value, January 1, 2011: 900,000
Excess fair value over book value (assigned to trademarks) is amortized over 20 years.
The initial value method is used by both companies.
The following information is available regarding Jones and Whitton: 
-Compute the noncontrolling interest in net income for 2011.
A) $11,000. 
B) $10,800. 
C) $9,000. 
D) $8,200. 
E) $7,200.

On January 1, 2010, Jones Company Bought 15% of Whitton