---### Non-Controlling Interest Calculation#### Problem Statement:On 1/1/2019, X CO acquired 80% of Y common stock for $150,000. On the same day, Y's net assets were valued at $140,000. The fair value of assets and liabilities were equal. By the end of the year on 31/12/2019, Y reported an income of $50,000 and declared a dividend of $30,000. X CO is using equity methods. Calculate the non-controlling interest balance on 1/1/2019.#### Choices:- a. $37,500- b. $47,500- c. $50,000- d. $10,000#### Solution:Let's calculate the non-controlling interest (NCI) at the acquisition date, which is 1/1/2019.1. **Total Net Assets of Y on 1/1/2019:** \[ \text{Net Assets} = \$140,000 \]2. **Percentage Ownership by X CO:** \[ \text{Ownership Percentage} = 80\% \]3. **Percentage of Non-Controlling Interest:** \[ \text{Non-Controlling Interest Percentage} = 100\% - 80\% = 20\% \]4. **Value of Non-Controlling Interest:** \[ NCI = \text{Net Assets} \times \text{NCI Percentage} \\ NCI = \$140,000 \times 20\% = \$28,000 \]Hence, the non-controlling interest balance on 1/1/2019 should be \$28,000. However, since the choices given in the question do not match with this calculated value, it indicates either the problem statement might need a closer examination or additional assumptions might be needed to reconcile the given options. Please review the details provided or assumptions used in the calculation.#### Final Answer:Refer to the available choices and recheck given conditions or stated figures for alignment with the choices.---This explanation transforms the image into a clear, structured text suitable for an educational website. It includes a detailed step-by-step solution for understanding the calculation of non-controlling interest.

The question is related to Consolidated Financial Statements. Date of Acquisition:- 1/1/2019 Stake…

on 1/1/2019 X CO acquired 80% of Y common stock for $150,000 in the same day the Y net assets was $ 140,000 , in the same date the fair value of assets and liabilities were equal .year ended 31/12/2019 Y reported income $50,000 , declared dividend $30,000 , X using equity methods what is non- controlling interest balance on 1/1/2019 Select one: a. 37,500 b. 47,500 c. 50,000 d. 10,000 Next page ere to search hp 近

on 1/1/2019 X CO acquired 80% of Y common stock for $150,000 in the same day the Y net assets was $ 140,000 , in the same date the fair value of assets and liabilities were equal .year ended 31/12/2019 Y reported income $50,000 , declared dividend $30,000 , X using equity methods what is non- controlling interest balance on 1/1/2019 Select one: a. 37,500 b. 47,500 c. 50,000 d. 10,000 Next page ere to search hp 近

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

---

### Non-Controlling Interest Calculation

#### Problem Statement:
On 1/1/2019, X CO acquired 80% of Y common stock for $150,000. On the same day, Y's net assets were valued at $140,000. The fair value of assets and liabilities were equal. By the end of the year on 31/12/2019, Y reported an income of $50,000 and declared a dividend of $30,000. X CO is using equity methods. Calculate the non-controlling interest balance on 1/1/2019.

#### Choices:
- a. $37,500
- b. $47,500
- c. $50,000
- d. $10,000

#### Solution:
Let's calculate the non-controlling interest (NCI) at the acquisition date, which is 1/1/2019.

1. **Total Net Assets of Y on 1/1/2019:**
\[
\text{Net Assets} = \$140,000
\]

2. **Percentage Ownership by X CO:**
\[
\text{Ownership Percentage} = 80\%
\]

3. **Percentage of Non-Controlling Interest:**
\[
\text{Non-Controlling Interest Percentage} = 100\% - 80\% = 20\%
\]

4. **Value of Non-Controlling Interest:**
\[
NCI = \text{Net Assets} \times \text{NCI Percentage} \\
NCI = \$140,000 \times 20\% = \$28,000
\]

Hence, the non-controlling interest balance on 1/1/2019 should be \$28,000. However, since the choices given in the question do not match with this calculated value, it indicates either the problem statement might need a closer examination or additional assumptions might be needed to reconcile the given options. Please review the details provided or assumptions used in the calculation.

#### Final Answer:
Refer to the available choices and recheck given conditions or stated figures for alignment with the choices.

---

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