Paris, Inc. owns 80 percent of the voting stock of Stance, Inc. The excess total fair value over book value was $75,000. Stance holds 10 percent of the voting stock of Paris. The payment for that investment was in excess of book value and fair value by $15,000. Any excess fair value is assigned to trademarks to be amortized over a 10-year period. During the current year, Paris reported operating income of $200,000 and dividend income from Stance of $20,000. At the same time, Stance reported operating income of $40,000 and dividend income from Paris of $5,000.
What will be reported as the non-controlling interest in Stance's net income?

Question

Quizplus · Accepted Answer

Operating Income ($40,000) - Amortization ($1,500) = Sub's Accrual Income ($38,500 × .20) $7,700