12 pennack corporation purchased 75 of the outstanding stock of shing corporation on 4307678

12 pennack corporation purchased 75 of the outstanding stock of shing corporation on 4307678

12) Pennack Corporation purchased 75% of the outstanding stock of Shing Corporation on January 1, 2011 for $300,000 cash. At the time of the purchase, the book value and fair value of Shing's assets and liabilities were equal. Shing's balance sheet at the time of acquisition and December 31, 2011 are shown below.

Jan 1, 2011 Dec 31, 2011

Cash$75,000 80,000

Other current assets 175,000160,000

Plant Assets — net 250,000240,000

     Total assets 500,000480,000

Liabilities 100,000 50,000

Capital stock 100,000100,000

Retained earnings 300,000330,000

     Total liabilities and equity 500,000480,000

Shing earned $60,000 in income during the year, and paid out $30,000 in dividends. Pennack uses the equity method to account for its investment in Shing.

Requirement 1:  Calculate Pennack's net income from Shing in 2011.

Requirement 2:  Calculate the noncontrolling interest share in Shing's income for 2011.

Requirement 3:  Calculate the balance in the Investment in Shing account reported on Pennack's separate general ledger at December 31, 2011.

Requirement 4:  Calculate the noncontrolling interest that will be reported on the consolidated balance sheet at December 31, 2011.

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