Prescott Corp. owned 90% of Bell Inc., while Bell owned 10% of the outstanding common shares of Prescott. No goodwill or other allocations were recognized in connection with either of these acquisitions. Prescott reported operating income of $266,000 for 2009 whereas Bell earned $98,000 during the same period. No investment income was included within either of these income totals. On a consolidated income statement, what is the noncontrolling interest in Bell's net income ?

Question

Quizplus · Accepted Answer

The noncontrolling interest in Bell's net income is calculated as 10% of Bell's net income, which is $98,000. Therefore, the noncontrolling interest is 10% of $98,000, which equals $9,800.