On January 1st, 2008, Batman Company acquired all of the voting stock of Catwomen Company at book
Question:
On January 1st, 2008, Batman Company acquired all of the voting stock of Catwomen Company at book value. Batman accounts for its investment in Catwomen using the initial value method (cost method) and Catwomen does not pay dividends. On January 1st 2016, Batman issued (sold) 800 of $1,000 par 20 year 8% semiannual bonds for $760,000. Batman uses the straight-line method to amortize the bond discount. On January 1st, 2019, Catwomen purchased all of the bonds for $817,000. Catwomen also use the straight-line method to amortize the premium. In 2019, Batman reported an income of $555,000 (unconsolidated) and Catwomen reported an income of $35,000. In 2020, Batman reported an income of $589,000 (unconsolidated) and Catwomen reported an income of $47,000.
Required: What is consolidated income in 2019 and in 2020.
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker