What is the 2021 consolidated net income before allocation to the controlling and noncontrolling interests?

a. $400,000

b. $486,000

c. $491,600

d. $500,000

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech’s book value was $400,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $200,000. At the acquisition date, K-Tech’s trademark (10-year remaining life) was undervalued in its financial records by $60,000. Also, patented technology (5-year remaining life) was undervalued by $40,000.

In 2020, K-Tech reports $30,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders’ equity accounts have been omitted):

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French К-Тech К-Тech Company Carrying Amounts Carrying Amounts Company Company Fair Values $ 320,000 280,000 $ 300,000 200,000 Current assets $620,000 Trademarks 260,000 Patented technology Liabilities 410,000 150,000 (120,000) (400,000) 300,000 190,000 (390,000) (900,000) 500,000 Not given (120,000) Revenues Expenses Investment income