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    NCI in Net Income of Subsidiary

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    Junzen Ralph Yap
    The document shows journal entries for consolidating the financial statements of a parent company and its subsidiary. It eliminates equity accounts and recognizes the non-controlling interest (NCI). It eliminates intercompany transactions and calculates the NCI portion of the subsidiary's net income. Finally, it establishes the ending balance of the NCI account based on the beginning balance, subsidiary dividends, and NCI portion of net income.

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    NCI in Net Income of Subsidiary

    Uploaded by

    Junzen Ralph Yap
    91 views2 pages
    The document shows journal entries for consolidating the financial statements of a parent company and its subsidiary. It eliminates equity accounts and recognizes the non-controlling interest (NCI). It eliminates intercompany transactions and calculates the NCI portion of the subsidiary's net income. Finally, it establishes the ending balance of the NCI account based on the beginning balance, subsidiary dividends, and NCI portion of net income.

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    The document shows journal entries for consolidating the financial statements of a parent company and its subsidiary. It eliminates equity accounts and recognizes the non-controlling interest (NCI). It eliminates intercompany transactions and calculates the NCI portion of the subsidiary's net income. Finally, it establishes the ending balance of the NCI account based on the beginning balance, subsidiary dividends, and NCI portion of net income.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    91 views2 pages

    NCI in Net Income of Subsidiary

    Uploaded by

    Junzen Ralph Yap
    The document shows journal entries for consolidating the financial statements of a parent company and its subsidiary. It eliminates equity accounts and recognizes the non-controlling interest (NCI). It eliminates intercompany transactions and calculates the NCI portion of the subsidiary's net income. Finally, it establishes the ending balance of the NCI account based on the beginning balance, subsidiary dividends, and NCI portion of net income.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 2

    1 Dividend Income 32000 Solution:

    Non-Controlling Interest 8000 Sales


    Dividends declared - S Co. 40000 Less: Cost and Expenses (14
    To eliminate intercompany dividends Net Income
    Realized profit in beginning
    2 Common Stock - S Co. 90000 Less: Unrealized profit in en
    Retained Earnings - S Co. 220000 Adjusted net income
    Investment in S Company 248000 Multiply: NCI proportionate
    Non-Controlling Interest 62000 NCI in net income of subsid
    To eliminate equity accounts against subsidiary account and recognize NCI

    3 Non-Controlling Interest 4000


    Retained Earnings, beg. - P Co. 16000 P Company net income (250
    Cost of Goods Sold 20000 S Company adjusted net inc
    To eliminate realized profit in beginning inventory Consolidated Net Income

    4 Sales 150000
    Cost of Goods Sold 135000
    Inventory, Dec. 31 15000 NCI, Aug. 30, 2019 (310000
    To eliminate intercompany sales and unrealized profit in ending inventory Less:NCI in subsidiary divide
    NCI in net income of subsid
    5 NCI in net income of subsidiary 9000 NCI, end
    Non-Controlling Interest 9000
    To establish minority interest in net income of S Company
    ₱ 200,000
    Less: Cost and Expenses (140000+20000) ₱ 160,000
    Net Income ₱ 40,000
    Realized profit in beginning inventory - Upstream ₱ 20,000
    Less: Unrealized profit in ending inventory - Upstream ₱ 15,000
    Adjusted net income ₱ 45,000
    Multiply: NCI proportionate share ₱ 0.20
    NCI in net income of subsidiary ₱ 9,000

    P Company net income (250000 - 32000) ₱ 218,000


    S Company adjusted net income ₱ 45,000
    Consolidated Net Income ₱ 263,000

    NCI, Aug. 30, 2019 (310000 x 20%) ₱ 62,000


    Less:NCI in subsidiary dividends (40000 x 20%) ₱ 8,000
    NCI in net income of subsidiary ₱ 9,000
    ₱ 63,000

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