Kurton Inc. owned 90% of Luvyn Corp.'s voting common stock. The consideration paid exceeded book value by $110,000. Of this amount, one half is attributable to a patent and is to be amortized over 5 years. Luvyn held 20% of Kurton's voting common stock, which cost $28,000 more than fair value. During the current year, Kurton reported separate net income of $224,000 as well as dividend income from Luvyn of $37,800. At the same time, Luvyn reported its separate net income of $70,000 as well as dividend income from Kurton of $19,600.Required:Using the treasury stock approach, prepare a schedule to show what is reported as the net income attributable to the noncontrolling interest in Luvyn.
What will be an ideal response?
| Separate net income of Luvyn | $ | 70,000 | |
| Dividend income | 19,600 | ||
| Less: amortization of excess patent allocation | (11,000 | ) | |
| Luvyn Corp.'s net income for consolidation | $ | 78,600 | |
| Noncontrolling interest percentage | 10 | % | |
| Net income attributable to the noncontrolling interest | $ | 7,860 | |
? | |||
| ? | |||
| $55,000/5 years = 11,000 | |||
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