Prairie Corporation is a primary beneficiary for Vintage Company, a variable interest entity. When Prairie obtained financial control over Vintage, any excess fair value over Prairie’s book value was attributed solely to goodwill. Prairie owns 15 percent of Vintage Company’s common stock and participation rights that entitle it to an additional 40 percent of Vintage’s net income. In the current year Prairie reports $400,000 of net income before consideration of its investment in Vintage. Vintage Company reports net income of $100,000. What amount of consolidated net income is attributable to the noncontrolling interest?a. $15,000b. $45,000c. $60,000d. $85,000

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.