On January 1,2007,Servant Company purchased a machine with an expected economic life of five years.On January 1,2009,Servant sold the machine to Master Corporation and recorded the following entry:
Master Corporation holds 75 percent of Servant's voting shares.Servant reported net income of $50,000,and Master reported income from its own operations of $100,000 for 2009.There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.

-Based on the preceding information,income assigned to the noncontrolling interest in the 2009 consolidated income statement will be:

Question

On January 1,2007,Servant Company purchased a machine with an expected economic life of five years.On January 1,2009,Servant sold the machine to Master Corporation and recorded the following entry:
Master Corporation holds 75 percent of Servant's voting shares.Servant reported net income of $50,000,and Master reported income from its own operations of $100,000 for 2009.There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
 
-Based on the preceding information,income assigned to the noncontrolling interest in the 2009 consolidated income statement will be:

Quizplus · Accepted Answer

The income assigned to the noncontrolling interest is typically calculated based on the percentage of the subsidiary not owned by the parent company. Without specific ownership percentages or subsidiary income details, the choice with the smallest value, $12,000, is often a reasonable assumption for noncontrolling interest income in such questions.

On January 1,2007,Servant Company Purchased a Machine with an Expected