Answer:
$85,500
Step-by-step Explanation:
Step 1
Non-controlling interest of book value of net assets (January 1)
= Common stock (Jan 1) + Retained earnings (Jan 1)
= ($100,000 + $150,000) x 20%
= $50,000
Step 2
Fair value of net assets (Jan 1)
= Cash paid for 80% stock + Fair value of remaining 20% stock
= $260,000 + $65,000
= $325,000
Non-controlling portion of excess of assets' fair value over book value
= (Fair value - Book value) x 20%
= ($325,000 - $250,000) x 20%
= $15,000
Step 3
Amortization expense
= Amortization of undervalued equipment + Amortization on secret formulas
= ($25,000 / 5) + ($50,000 / 20)
= $7,500
Non-controlling portion of net income after adjusting for amortization
= ($110,000 - $7,500) x 20%
= $20,500
Step 4
Consolidated total of non-controlling interest
= $50,000 + $15,000 + $20,500
= $85,500
