On April 1, Pujols, Inc., exchanges $590,000 fair-value consideration for 70 percent of the outstanding stock of Ramirez Corporation. The remaining 30 percent of the outstanding shares continued to trade at a collective fair value of $234,300. Ramirez's identifiable assets and liabilities each had book values that equaled their fair values on April 1 for a net total of $700,000. During the remainder of the year, Ramirez generates revenues of $635,000 and expenses of $405,000 and declared no dividends. On a December 31 consolidated balance sheet, what amount should be reported as noncontrolling interest?

Question

Business

Tania Malone

9 October, 22:50

On April 1, Pujols, Inc., exchanges $590,000 fair-value consideration for 70 percent of the outstanding stock of Ramirez Corporation. The remaining 30 percent of the outstanding shares continued to trade at a collective fair value of $234,300. Ramirez's identifiable assets and liabilities each had book values that equaled their fair values on April 1 for a net total of $700,000. During the remainder of the year, Ramirez generates revenues of $635,000 and expenses of $405,000 and declared no dividends. On a December 31 consolidated balance sheet, what amount should be reported as noncontrolling interest?

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Answers (1)

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Mateo Lopez · Answer 1

Closing NCI = $234,300 + $69,000 = $303,300

Explanation:

The Question is to identify the non-controlling interes in Ramirez Corporation

First we determine the Net income of Ramirez

Net Income = Revenues - Expenses

= $635,000 - $405,000 = $230,000

The next step is to dtermine the value of non - controling interest in teh net income of Ramirez.

Non-Controlling Interest in Net Income = NCI percentge x Net Income

= 30% x $230,000 = $69,000

Finally, based on these calculations, we can compute the Closing Balance of Non-Controlling Interest

The formula = Opening Non-Controlling Interest + Non-controlling Interest Share of Net income

Closing NCI = $234,300 + $69,000 = $303,300