On January 1, 20X9, Company A acquired 80 percent of the common stock and 60 percent of the preferred stock of Company B, for $400,000 and $60,000, respectively. At the time of acquisition, the fair value of the common shares of Company B held by the noncontrolling interest was $100,000. Company B's balance sheet contained the following balances: For the year ended December 31, 20X9, Company B reported net income of $100,000 and paid dividends of $40,000. The preferred stock is cumulative and pays an annual dividend of 10 percent.
Based on the preceding information, the eliminating entry to prepare the consolidated financial statements for Company A as of December 31, 20X9 will include a credit to noncontrolling interest in net income of Company B for:

Question

On January 1, 20X9, Company A acquired 80 percent of the common stock and 60 percent of the preferred stock of Company B, for $400,000 and $60,000, respectively. At the time of acquisition, the fair value of the common shares of Company B held by the noncontrolling interest was $100,000. Company B's balance sheet contained the following balances:  For the year ended December 31, 20X9, Company B reported net income of $100,000 and paid dividends of $40,000. The preferred stock is cumulative and pays an annual dividend of 10 percent.
Based on the preceding information, the eliminating entry to prepare the consolidated financial statements for Company A as of December 31, 20X9 will include a credit to noncontrolling interest in net income of Company B for:

Quizplus · Accepted Answer

The Answer is D

On January 1, 20X9, Company a Acquired 80 Percent of the Common