January 1, 2020, Doja Cat Company purchased 80% of the outstanding shares of Da Bhabie Company for $80,000. On the date of acquisition, Da Bhabie Company reported Ordinary Shares of $80,000 and Retained Earnings of $20,000. Da Bhabie's Inventory was understated by $2,000; Equipment with a 5-year life was understated by $2,000, Building with an 8-year life was understated by $8,000 and land was understated by $4,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on
On January 1, 2020, Doja Cat Company purchased 80% of the outstanding shares of Da Bhabie Company for $80,000. On the date of acquisition, Da Bhabie Company reported Ordinary Shares of $80,000 and
The following are taken from the books of Doja Cat and Da Bhabie for 2020.
| Doja Cat (in dollars) | Da Bhabie (in dollars) | |
| Sales | 200,000 | 150,000 |
| Gross Profit | 55,000 | 35,000 |
| Net Income | 20,000 | 15,000 |
| Dividend Declared (To be paid on January, 15, 2021) | 10,000 | 5,000 |
| Total Assets | 500,000 | 400,000 |
Assuming the retained earnings of Da Bhabie on December 31, 2021 is $35,000, determine the non-controlling interest to be reported in the consolidated financial statements on December 31, 2021 assuming no changes to Da Bhabie company's ordinary shares.
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