A parent and its 80 percent owned subsidiary have made several intercompany sales of noncurrent assets
during the past two years. The amount of income assigned to the noncontrolling interest for the second year
should include the noncontrolling interest's share of gains:
A. unrealized in the second year from upstream sales made in the second year.
B. realized in the second year from downstream sales made in both years.
C. realized in the second year from upstream sales made in both years.
D. both realized and unrealized from upstream sales made in the second year.
Colton Company purchased 80 percent of the outstanding stock of Mota Company on January 1, 2007, at a
price of $484,000, which was $100,000 greater than the underlying book value of the stock. All of the
differential was attributable to a patent with a remaining life of 10 years. Colton uses the basic equity
method to account for its investment in Mota. For the year 2008, Mota reported net income of $80,000 and
paid dividends of $40,000, while Colton had separate operating income of $200,000 and paid dividends of
$60,000. For the year 2007, Mota had reported net income of $100,000 and dividends of $40,000. At the
end of 2007, Mota purchased land from Colton for $64,000. The original cost to Colton had been $84,000.
On January 1, 2008, Colton purchased a building from Mota for $100,000. The building had a book value
of $80,000 and a remaining useful life of five years. Mota's retained earnings at the date of combination
Summarized balance sheet data at December 31, 2008, are as follows:
Based on the information given above, at what amount will the patent be reported on the consolidated
balance sheet on December 31, 2008?