Xing Corporation owns 80 percent of the voting common shares of Adams Corporation.Noncontrolling interest was assigned $24,000 of income in the 20X9 consolidated income statement.What amount of net income did Adams Corporation report for the year?
A) $150,000
B) $96,000
C) $120,000
D) $30,000

Question

Quizplus · Accepted Answer

Since Xing Corporation owns 80 percent of Adams Corporation, it means that it has a controlling interest in Adams Corporation. Therefore, the $24,000 of income assigned to non-controlling interest represents the remaining 20% of the voting common shares owned by other shareholders. This implies that the total net income of Adams Corporation for the year is $120,000 (which is 80% of the total net income). Therefore, the correct answer is C) $120,000.

Xing Corporation Owns 80 Percent of the Voting Common Shares