Question

Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2019. During 2019, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of fair value allocations totaled $60,000 in 2019. Not including its investment in Harbor, Femur Co. had its own revenues of $4,500,000 and expenses of $3,000,000 for the year 2019. What is the noncontrolling interest's share of earnings for Harbor Corp

Answer 1

Answer:

$1,808,000

Explanation:

The noncontrolling interest's share of the earnings of Harbor Corp. for 2019 is calculated to be:

=($2,500,000 - $2,000,000- $60,000) * 0.3 = $132,000

Amount of consolidated net income for 2019 should be allocated to Femur’s controlling interest in Harbor

= $440,000 - $132,000 = $308,000

Amount Femur Co. would report as consolidated net income for 2019:

= $1,500,000 + $308,000 = $1,808,000