Consolidated net income attributable to the shareholders of the parent for 2018 would be:
LEO Inc. acquired a 60% interest in MARS Inc. on January 1, 2018 for $400,000. Unless otherwise stated, LEO uses the cost method to account for its investment MARS Inc. On the acquisition date, MARS had common stock and retained earnings valued at $100,000 and $150,000 respectively. The acquisition differential was allocated as follows:
$80,000 to undervalued inventory.
$40,000 to undervalued equipment. (to be amortized over 20 years)
The following took place during 2018:
? MARS reported a net income and declared dividends of $25,000 and $5,000 respectively.
? LEO's December 31, 2018 inventory contained an intercompany profit of $10,000.
? LEO's net income was $75,000.
The following took place during 2019:
? MARS reported a net income and declared dividends of $36,000 and $6,000 respectively.
? MARS' December 31, 2019 inventory contained an intercompany profit of $5,000.
? LEO's net income was $48,000.
Both companies are subject to a 25% tax rate. All intercompany sales as well as sales to outsiders are priced to provide the selling company with gross margin of 20%.
A) $36,300. B) $33,300. C) $12,500. D) $53,200.
B) $33,300.
You might also like to view...
Under the indirect method, instead of reporting cash receipts and payments, net income is reconciled with net cash from operating activities
a. True b. False Indicate whether the statement is true or false
What is an example of an ethics-based initiative that could be evaluated through employee performance?
a. employee participation in personal philanthropy b. affirmative action hiring goals c. mood of employees in a department d. how many promotions have been made in a year
Which of the following is true about financial institutions in the United States and those in other countries??
A. ?U.S. financial institutions have been much more heavily regulated as compared to their foreign counterparts with regard to expansion (branching) and the services that could be offered. B. ?U.S. financial institutions have been much more leniently regulated as compared to their foreign counterparts with regard to expansion (branching) and the services that could be offered. C. ?U.S. financial institutions and their foreign counterparts have similar regulations with regard to expansion (branching) and the services that could be offered. D. ?Most U.S. intermediaries are allowed to engage in nonbanking (nonfinancial) business activities, whereas the nonbanking activities of foreign financial institutions have been severely restricted until recently. E. ?U.S. financial institutions and their foreign counterparts have similar regulations with regard to engaging in nonbanking activities.
A U.S. athletic equipment company has production plants in several Pacific Rim countries. Each plant is divided into separate production areas using six-foot thick concrete walls
The construction method is designed to prevent fire from spreading from one production area to another. Using thick concrete walls so that fire does not spread to another production area illustrates which risk control method? A) separation B) duplication C) risk avoidance D) diversification