Fox owns 60% of the outstanding common shares of Sox and uses the cost method to account for its investment.On January 1,20X4,Fox sold a machine to Sox for $300,000.The equipment had a net book value of $150,000 and a remaining useful life of 5 years at the time of the intercompany sale.Both companies record a full year of amortization expense in the year of purchase and no amortization in the year of sale.The net book value of the equipment on the separate-entity financial statements of Fox and Sox at December 31,20X6 were $1,000,000 and $600,000,respectively.Ignoring income taxes,what is the non-controlling interest's share of the consolidation adjustment(s)on the income statement for the year ended December 31,20X6?
A)$0
B)$12,000
C)$24,000
D)$36,000

Question

Quizplus · Accepted Answer

The Answer of Fox owns 60% of the outstanding common shares of Sox and uses the cost method to account for its investment.On January 1,20X4,Fox sold a machine to Sox for $300,000.The equipment had a net book value of $150,000 and a remaining useful life of 5 years at the time of the intercompany sale.Both companies record a full year of amortization expense in the year of purchase and no amortization in the year of sale.The net book value of the equipment on the separate-entity financial statements of Fox and Sox at December 31,20X6 were $1,000,000 and $600,000,respectively.Ignoring income taxes,what is the non-controlling interest's share of the consolidation adjustment(s)on the income statement for the year ended December 31,20X6?
A)$0
B)$12,000
C)$24,000
D)$36,000

Fox Owns 60% of the Outstanding Common Shares of Sox