# Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2012, Devin made frequent sales of inventory to Bauerly. There were unrealized gains of $40,000 in the beginning inventory and $25,000 of unrealized gains at the end of the year. Devin reported net income of $137,000 for 2012. Bauerly decided to use the equity method to account for the investment. What is the non-controlling interest's share of Devin's net income for 2012

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###### Question:

Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2012, Devin made frequent sales of inventory to Bauerly. There were unrealized gains of $40,000 in the beginning inventory and $25,000 of unrealized gains at the end of the year. Devin reported net income of $137,000 for 2012. Bauerly decided to use the equity method to account for the investment. What is the non-controlling interest's share of Devin's net income for 2012

## Answers

Answer: $ $ Net Income (137000*30%) (a) 41,100 Add: Unrealized gains in the beginning inventory 40,000 Unrealized gains at the end of the year 25,000 Difference 15,000 (NCI in Unrealized gain (15,000*30%) (b) 4,500 Non-controlling interest's share of Devin's net income for 2012 ($41,100+$4,500) 45,600Non-controlling interest's share of Devin's net income for 2012= $45,600Explanation:

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