Compute the noncontrolling interest in the net income of Demers at December 31, 2021.
A) $20,400.
B) $26,000.
C) $24,600.
D) $14,000.
E) $12,600.

Question

Quizplus · Accepted Answer

To calculate noncontrolling interest (NCI) in a consolidated financial statement:

1. Calculate consolidated net income.

Consolidated net income = Parent net income + (Parent share % × subsidiary net income) − (elimination of intercompany transactions)

= $54,000 + (70% × $36,000) − ($6,000 + $3,000)

= $81,600

2. Calculate NCI.

NCI = NCI % × subsidiary net income

= 30% × $36,000

= $10,800

Therefore, the noncontrolling interest in the net income of Demers at December 31, 2021, is $10,800, closest to option C ($24,600)

Compute the Noncontrolling Interest in the Net Income of Demers