Norek Corp.owned 70% of the voting common stock of Thelma Co.On January 2,2009,Thelma sold a parcel of land to Norek.The land had a book value of $32,000 and was sold to Norek for $45,000.Thelma's reported net income for 2009 was $119,000.What is the noncontrolling interest's share of Thelma's net income?

Question

Quizplus · Accepted Answer

To calculate the noncontrolling interest's share of Thelma's net income, we first need to calculate the net income attributable to Norek Corp. (the controlling interest).

Since Norek owns 70% of Thelma, we can assume that it is entitled to 70% of Thelma's net income. Thus:

Net income attributable to Norek = 0.7 x $119,000 = $83,300

To calculate the noncontrolling interest's share of net income, we simply subtract the net income attributable to Norek from Thelma's total net income:

Noncontrolling interest's share of net income = Total net income - Net income attributable to Norek 
= $119,000 - $83,300 
= $35,700

Thus, the answer is B) $31,800.