Johnson Inc is the wholly owned subsidiary of Stuart Corporation
Johnson Inc. is the wholly owned subsidiary of Stuart Corporation. The 2012 income statements for the two corporations are as follows:
The acquisition cost of Stuart’s 100 percent ownership interest in Johnson equaled its book value on Johnson’s records. During 2012, Johnson pays a cash dividend of $ 25 to Stuart.
Required:
1. Calculate the income from investment in Johnson as reported on Stuart’s income statement.
2. Calculate the 2012 net income reported by the parent company (Stuart) on its income statement.
3. Prepare the 2012 consolidated income statement for Stuart and Johnson.
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