Putter Corporation owns 80 percent of the voting common shares of Sand Corporation. Noncontrolling interest was assigned $24,000 of income in the 20X9 consolidated income statement. What amount of net income did Sand Corporation report for the year? (A) $150,000 (B) $96,000 (C) $ 120,000 (D) $30,000

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Chris

23 August, 11:25

Putter Corporation owns 80 percent of the voting common shares of Sand Corporation. Noncontrolling interest was assigned $24,000 of income in the 20X9 consolidated income statement. What amount of net income did Sand Corporation report for the year? (A) $150,000 (B) $96,000 (C) $ 120,000 (D) $30,000

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Amy Austin · Answer 1

(C) $ 120,000

Explanation:

In the consolidated income statement, the net income is usually shared between the shareholders with controlling interest and the non-controlling interest. The sharing is done based on percentage holding.

Hence if Putter Corporation owns 80 percent of the voting common shares of Sand Corporation, the non controlling interest will be 20%

Let the net income reported be g

20% of g = $24,000

g = $24,000/0.2

g = $120,000