Question

Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2020. During 2020, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of fair value allocations totaled $60,000 in 2020. Not including its investment in Harbor, Femur Co. had its own revenues of $4,500,000 and expenses of $3,000,000 for the year 2020. The noncontrolling interest's share of the earnings of Harbor Corp. for 2020 is calculated to be

Answer 1

The answer is $132,000

Step-by-step explanation:

Solution

Given that:

Harbor revenues = $2,500,000

Expenses = $2,000,000

The amortization of fair value allocations = $60,000

Femur corporation revenues =$4,500,000

expenses = $3,000,000

Now,w e have to compute for the non controlling interest's share of the earnings of Harbor Corp which is given below:

=[revenue of harbor - expenses of harbor - amortization of fair value allocations] 30%

= [$2,500,000 - $2,000,000- $60,000] * 30%

=[$500000 - $60000]* 30%

=$132,000

Therefore the non controlling interest's share of the earnings of Harbor Corp is $132,000