Question

Renz Co. acquired 80% of the voting common stock of Sogers Corp. on January 1, 2022. During 2022, Sogers had revenues of $2,700,000 and expenses of $2,100,000. The amortization of fair value allocations totaled $65,000 in 2022. Not including its investment in Sogers, Renz Co. had its own revenues of $4,800,000 and expenses of $3,600,000 for the year 2022.
The noncontrolling interest's share of the earnings of Sogers Corp. for 2022 is calculated to be:_______.
A. $0.
B. $240,000.
C. $133,000.
D. $120,000.
E. $107,000.

Answer 1

Answer:

E. $107,000.

Explanation:

The computation of the non-controlling interest of earnings share is shown below:

= Revenue - Expense - allocation of Amortization of fair value  

= $2,700,000 - $2,100,000 - $65,000

= $535,000

Now 80% is purchased by the Renz Co

So 20% would be owned by sogers Corp. So

That means

= $535,000 × 20%

= $107,000

Hence, the correct option is e. $107,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered