Question

9) Padhy Corporation owns 80% of Abrams Corporation, Abrams Corporation owns 60% of Bacud Corporation, and Bacud Corporation owns 10% of Abrams Corporation. The separate net incomes (excluding investment income) of Padhy, Abrams, and Bacud are $300,000, $100,000, and $80,000, respectively. Assume the investments were acquired at a cost equal to the book value of each investment, which also equals the fair value.

Required:

Calculate the controlling interest share of consolidated net income and the noncontrolling interest shares for Padhy Corporation and its subsidiaries. Use the conventional method for your solution.

Answer 1

	Net Income of	Amt $
	Padhy Corp	300,000
	Abrams Corp	100,000
	Bacud Corp	80,000
	Padhy's Income -a	300,000
	Abram's Income	100,000
	Padhy's share (80%)- b	80,000
	Bacud's share (10%)- c	10,000
	Non controlling interest (10%)A	10,000
	Bacud's Income	80,000
	Abram's share (60%)- d	48,000
	Non controlling interest (40%)B	32,000
	Controlling Interest share of consolidated income (a+b+c+d)	438,000
	Nin controlling interest (A+B)	42,000