Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, 2019, uncle company purchased 80 per

On January 1, 2019, Uncle Company purchased 80 percent of Nephew Company's capital stock for...

70.2K

Verified Solution

Question

Accounting

On January 1, 2019, Uncle Company purchased 80 percent of Nephew Company's capital stock for $600,000 in cash and other assets. Nephew had a book value of $726,000, and the 20 percent noncontrolling interest fair value was $150,000 on that date. On January 1, 2021, Nephew had acquired 30 percent of Uncle for $345,500. Uncle's appropriately adjusted book value as of that date was $1,085,000.

Separate operating income figures (not including investment income) for these two companies follow. In addition, Uncle declares and pays $20,000 in dividends to shareholders each year and Nephew distributes $5,000 annually. Any excess fair-value allocations are amortized over a 10-year period.

Year Uncle Company Nephew Company
2019 $ 160,000 $ 41,200
2020 198,000 47,400
2021 237,000 54,800

Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary's income recognized by Uncle in 2021?

What is the net income attributable to the noncontrolling interest for 2021?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Programming
1.2K views

A publisher needs to create a database based on the following requirements: The publisher publishes different books....

Basic Math
1.2K views

Graph the line with slope b 1 5 passing through 0 3 3 10 10...

Algebra
1.2K views

Use Figure 9 2 to complete problems 2 and 3 Check your answers in the...

Algebra
1.2K views

4 12 pts Consider a matrix A 10 10 1 0 1 1 5 0...

Algebra
1.2K views

Annual Percentage Rate APR Mr Winking is purchasing a car and needs to finance a...

Accounting
1.2K views

The master budget details: Multiple Choice Long-term objectives. Short-term...

Accounting
1.2K views

Tamarisk Corporation had income from continuing operations of $10,763,000 in 2025 . During 2025 ,...

Accounting
1.2K views

You have been invited to interview for an internship with an international food manufacturing company....

Accounting
1.2K views

asap pls Oavenport incorporated offers a new employee two options. First, the...

Accounting
1.2K views

Alex, who is single, conducts an activity in 2018 that is appropriately classified as a...

Accounting
1.2K views

Wilhelm Company collected $7,200 in May of 2020 for 4 months of service which would...

Accounting
1.2K views

Categorize this account What account type is this T-account? Date Jul 01 Jul 21 Balance...