Compute the non-controlling interest in lan at December 31, 2024.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sue Inc. acquires 80% of lan Co. for $500,000 on January 2, 2024. lan reported common
stock of $300,000 and retained earnings of $210,000 on that date. Equipment was
undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year
remaining life. Any excess consideration transferred over fair value was attributed to goodwill
with an indefinite life. Based on an annual review, goodwill has not been impaired.
lan Co. earns income and pays dividends as follows:
2024
2025
Net income $ 100,000 $120,000 $130,000
Dividends 40,000 50,000
60,000
Assume the equity method is applied.
Compute the non-controlling interest in lan at December 31, 2024.
O $135,600.
$137,000.
O $112,000.
$100,000.
2026
O $118,600.
Transcribed Image Text:Sue Inc. acquires 80% of lan Co. for $500,000 on January 2, 2024. lan reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. lan Co. earns income and pays dividends as follows: 2024 2025 Net income $ 100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. Compute the non-controlling interest in lan at December 31, 2024. O $135,600. $137,000. O $112,000. $100,000. 2026 O $118,600.
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