Jaynes Inc. acquired all of Aaron Co.'s common stock on January 1, 2017, by issuing 11,000 shares of $1 par value common stock. Jaynes' shares had a $17 per share fair value. On that date, Aaron reported a net book value of $120,000. However, its equipment (with a five-year remaining life) was undervalued by $6,000 in the company's accounting records. Any excess of consideration transferred over fair value of assets and liabilities acquired is assigned to an unrecorded patent to be amortized over ten years.The following figures came from the individual accounting records of these two companies as of December 31, 2017: Jaynes Inc. Aaron Co.Revenues$720,000 $276,000 Expenses 528,000 144,000 Investment incomeNot given - Dividends paid 100,000 60,000 ??The
following figures came from the individual accounting records of these two companies as of December 31, 2018:? Jaynes Inc. Aaron Co.Revenues$840,000 $336,000 Expenses 552,000 180,000 Investment incomeNot given - Dividends paid 110,000 50,000 Equipment 600,000 360,000 Retained earnings, 12/31/18 balance 960,000 216,000 ?What was consolidated net income for the year ended December 31, 2018?
What will be an ideal response?
| Net income of Jaynes Inc. ($840,000 - $552,000) | $ | 288,000 | |||||
| Net income of Aaron Co. ($336,000 - $180,000) | $ | 156,000 | |||||
| Amortization expense (from schedule below) | (7,300 | ) | |||||
| Consolidated net income - 2018 | $ | 436,700 | |||||
| Excess of fair value assigned to specific accounts based on fair value | |||||||
| Equipment | 6,000 | 5 years | $ | 1,200 | |||
| Patent | $ | 61,000 | 10 years | 6,100 | |||
| Total | $ | 7,300 | |||||
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