The Parent acquired 60% of the sub on Jan 1, paying $480,000. The above balance sheets are for the parent and sub at the date of acquisition. At the time of acquisition, any differential was attributed 50% to a trademark with a 10 year remaining life, and the remainder to goodwill.

During the first year after the acquisition, the Sub reported Net Income of $90,000 and paid dividends of $10,000. The parent had operating income of $225,000 (which did not include the income from the sub).

1. What is the consolidated net income for the first year?
2. What is the value of the NCI at the end of the first year?
3. What income from sub will be reported on the parent’s income statement the first year?

Answer rating: 100% (QA)

Part 1 The consolidated net income for the first year is 135000 In this situation the parent acquired 60 of the sub on January 1 paying 480000 The abo... View the full answer