On 1/1/22 Big acquired 60% of the voting stock of Little for $300,000. The fair value of the NC Interest was $200,000 on that date. Little's book value was $480,000. Little had land which was undervalued by $20,000 at that time. All other assets and liabilities had fair values equal to book value. During 2024, Little sold the land to a third party at a gain of $50,000. During 2024, Little reported total earnings of $90,000. What is the "income to the Non-controlling interest" in 2024?

On 1/1/22 Big acquired 60% of the voting stock of Little for $300,000. The fair value of the NC Interest was $200,000 on that date. Little's book value was $480,000. Little had land which was undervalued by $20,000 at that time. All other assets and liabilities had fair values equal to book value. During 2024, Little sold the land to a third party at a gain of $50,000. During 2024, Little reported total earnings of $90,000. What is the "income to the Non-controlling interest" in 2024?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Howard Corporation liquidates and distributes $20,000 cash and land with a fair market value of $80,000 to its sole shareholder, Ryan. Ryan also assumes a $12,000 mortgage that is a attached to the land. Ryan’s basis in the stock is $70,000. Compute the amount of gain or loss that Ryan will recognize on the liquidation.
Ellison exercised a nonstatutory stock option on May 31, 2023. He paid $16,000 for 100 shares of his company's stock. The fair market value of the shares on that date was $20,000. Although Ellison continues to hold these shares, he included the $4,000 difference between the fair market value and the purchase price as compensation income when he filed his 2023 return. What is Ellison's basis in the stock? $0 $4,000 $16,000 O $20,000
Belden, Incorporated, acquires 30 percent of the outstanding voting shares of Sheffield, Incorporated, on January 1, 2023, for $306,000, which gives Belden the ability to significantly influence Sheffield. Sheffield has a net book value of $784,000 at January 1, 2023. Sheffield's asset and liability accounts showed carrying amounts considered equal to fair values, except for a copyright whose value accounted for Belden's excess cost over book value in its 30 percent purchase. The copyright had a remaining life of 16 years at January 1, 2023. No goodwill resulted from Belden's share purchase. Sheffield reported net Income of $182,000 in 2023 and $244,000 of net Income during 2024. Dividends of $64,000 and $90,000 are declared and paid in 2023 and 2024, respectively. Belden uses the equity method. Required: a. On its 2024 comparative Income statements, how much Income would Belden report for 2023 and 2024 in connection with the company's Investment in Sheffield? b. If Belden sells its…
Assume, for purposes of this question only, that Susan acquired 2,000 shares of Hawk Corporation stock for $80,000 on March 31, 2014. On March 1, 2023, she sells 125 shares for $3,750. On March 22, 2023, she purchases 135 shares of Hawk Corporation stock for $4,725. a. What is Susan’s realized gain or loss from the sale on March 1, 2023? b. What is Susan’s recognized gain or loss from the sale on March 1, 2023? c. What is Susan’s basis in the 135 shares purchased on March 22, 2023? d. When does Susan’s holding period begin for the 135 shares
equired: Discuss the capital gain/loss for each of the assets, as well as the Net Capital Gain for Brittney (citing authority) Brittney purchased the following in June 2021: Shares in HOP Ltd for $200,000 Shares in KWQ Ltd for $300,000 A yacht (Brittney loved sailing on weekends) for $100,000 An antique diamond necklace that she often wears for $80,000 During the time she owned the above assets, Brittney paid a total of $10,000 in insurance for the diamond necklace. Brittney then makes the following sales of the above items in January 2024: Shares in HOP Ltd for $400,000 Shares in KWQ Ltd for $150,000 Yacht $90,000 Antique diamond necklace $60,000
On May 2, 2015, Barney formed ABC Corporation contributing $200,000 in exchange for 100 percent of its stock. The corporation uses the funds to purchase a parcel of land. By April 14, 2020, the land had appreciated in value to $1,550,000. What are the tax consequences to ABC and Barney if the corporation sells the land and then liquidates? On May 2, 2014, Barney formed ABC Corporation contributing $200,000 in exchange for 100 percent of its stock. The corporation uses the funds to purchase a parcel of land. By April 14, 2020, the land had appreciated in value to $1,550,000. On December 12, 2017, he contributed Property #1 valued at $700,000 to ABC, receiving back additional ABC stock. Barney and ABC agreed to reduce the basis of Barney's stock in lieu of reducing ABC's basis in Property #1. Barney had purchased Property #1 in 2014 for $1,750,000. What are the tax consequences to ABC and Barney if, on April 14, 2020, the sells the land for $1,550,000 and Property #1 for $325,000 and…
Ms. Virginia Habangbuhay, decedent, owned a property valued at P3,000,000 at the time of her death. Thesaid property was sold by her a month before her death to Mr. Steve Maiklingbuhay for P2,000,000 when its value was P2,200,000. It was agreed by Ms. Habangbuhay and Mr. Maiklingbuhay that the transfer of ownership will take place after Ms. Habangbuhay’s death. For estate tax purposes, what is the amount includible in the gross estate of Ms. Habangbuhay?
Nicholas owns 60% of the shares of Orange Corp. (an S corporation with no accumulated E&P). Nicholas purchased his shares at the beginning of 2020 for $1,000. Orange Corp. reported the following during 2020: Ordinary business income: $40,000 Separately stated income items: $3,000 Separately stated loss items: $8,000 In addition, Orange Corp. paid off corporate debt (nonrecourse) of $10,000 in 2020. If Orange Corp. distributed $10,000 to Nicholas on March 1, 2020, what amount of the distribution is treated as capital gain?
On January 1, 2024, Mel purchased 100% of Troy's outstanding shares in exchange for 100,000 shares of its $1 par common stock with a fair value of $17 per share. On this date, the book value of Troy's net assets was $1,200,000. The fair values of Troy's identifiable assets and liabilities were the same as their carrying amounts except for land which had a fair value of $300,000 more than its book value. The journal entry on Mel’s books to record the acquisition will include Question 2Select one: a debit to Goodwill for $500,000. a debt to Land for $300,000. a credit to Common Stock for $1,700,000. a debit to Investment in Sub for $1,700,000.
During 2020, ABC Corporation (an S corporation since its inception) distributes inventory to its sole shareholder, Jeff, in liquidation of the S Corporation. The fair market value of the inventory (not a capital asset) at the time of the distribution was $250,000 and ABC's tax basis in the property was $450,000. Before considering the effects of the distribution, Jeff's basis in his ABC stock was $300,000. What amount of capital gain, if any, does Jeff recognize on the distribution of the inventory in liquidation of the S corporation?
Happy owns 80% of Sad, paying $500,000 on January 1, 2020. At that date, Sad had Equipment (20-year life) with a book value of 200,000 and a fair value of 600,000. In 2020 Sad had a net income of 100,000. How much is noncontrolling interest in subsidiary net income in 2020?