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13 December, 21:20

On January 1, 2018, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $450,000 goods that cost $330,000. At year-end, Gallow owned 15% of the goods transferred. Gallow reported a net income of $204,000, and Race's net income was $806,000. Race decided to use the equity method to account for this investment.

Assuming there are no excess amortizations associated with the consolidation and no other intra-entity asset transfers, what was the net income attributable to the noncontrolling interest?

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  1. 14 December, 01:02
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    Net income attributable to the noncontrolling interest is $40800

    Explanation:

    As far as non-controlling interest is concerned, Race Corp. and the non-controlling interest split the net income of Gallow Inc. proportionate to their ownership interests.

    Net income attributable to the noncontrolling interest

    ($204,000 x 20%) = $40800
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