Question

Lebron Co. owns most but not all of the shares of its subsidiary Bryant Inc. Lebron reported net income of \(124,700. The amount to be attributed to the noncontrolling interest in Bryant is \)30,000. Indicate how Lebron will report the noncontrolling interest in its income statement.

Short answer

The non-controlling interest is deducted from the net earnings of the parent company.

Step-by-step solution

Meaning of Non-Controlling Interest

Non-controlling interest refers to the position where the parent company contains no control over the decisions made by the subsidiaries.

Treatment of non-controlling interest

In the parent company's income statement, the non-controlling interest is deducted from the reportednet income.

Income Statement (an extract)

Particulars	Amounts ($)
Net income	124,700
Less: Non-controlling interest	(30,000)
Net earnings available	94,700