Reference no: EM133044246
Question - On January 1, Year 3, First Rate Corp (First) purchased 1,350 common shares of Second Opinion Ltd (Second) for $112,500. On this date, the shareholders' equity accounts of Second were as follows:
Common (ordinary) shares (1,685 shares issued and outstanding) = $35000
Preferred shares (5,500 shares issued and outstanding) = $71500
Retained earnings = $80000
The preferred shares have a $1/share dividend rate and are cumulative and non-participating with a liquidation value of $13.80 per share. The dividends were one year in arrears on January 1, Year 3.
The following information pertains to retained earnings for the two companies for Year 3:
|
|
First
|
Second
|
|
Retained earnings, beginning of the year
|
$146000
|
$80000
|
|
Net income
|
58000
|
36000
|
|
Dividends declared and paid
|
20000
|
18000
|
|
Retained earnings, end of the year
|
184000
|
98000
|
Additional information:
First uses the cost method to account for its investment in Second
Any acquisition differential related to patents with an estimated useful life of 5 years as of January 1, Year 3. Neither company has any patents recorded on their separate entity records.
Required -
A. Calculate non-controlling interest for the consolidated income statement for Year 3.
B. Calculate the non-controlling interest for the consolidated statement of financial position (balance sheet) at the end of Year 3.