What is consolidated net income for 2018? a. $194,000 b. $197,500 c. $203,000 d. $238,000 On January

Question:

What is consolidated net income for 2018?

a. $194,000

b. $197,500

c. $203,000

d. $238,000

On January 1, 2016, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $540,000 cash. The acquisition-date fair value of the noncontrolling interest was $60,000. At January 1, 2016, Star's net assets had a total carrying amount of $420,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $80,000. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $70,000 in 2016 and $80,000 in 2017. Each year since the acquisition, Star has declared a $20,000 dividend. At January 1, 2018, Pride's retained earnings show a $250,000 balance. Selected account balances for the two companies from their separate operations were as follows:

..........................................................................Pride.....................Star

2018 Revenues. . . . . . . . . . . . . . . . . . . . . . $498,000........$285,000

2018 Expenses. . . . . . . . . . . . . . . . . . . . . . . 350,000...........195,000

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Fundamentals of Advanced Accounting

ISBN: 978-1259722639

7th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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