Petunia Company acquired an 80% interest in Shaman Company in 201320132013 just once.In 2014 and 2015, Sutton reported net income of $400,000 and $480,000, respectively.During 2014, Shaman sold $80,000 of merchandise to Petunia for a $20,000 profit.Petunia sold the merchandise to outsiders during 2015 for $140,000.For consolidation purposes, what is the noncontrolling interest's share of Shaman's 2014 and 2015 net income?

Question

Quizplus · Accepted Answer

To find the noncontrolling interest's share of net income, we need to subtract the percentage of ownership held by the parent company from 100%.
Noncontrolling interest's share of 2014 net income = (20% × $400,000) = $80,000
Noncontrolling interest's share of 2015 net income = (20% × $480,000) = $96,000
Therefore, the answer is D, which is $76,000 and $100,000.

Petunia Company Acquired an 80% Interest in Shaman Company in 201320132013