apter 7 Homework Saved He Boulder, Inc., obtained 90 percent of Rock Corporation

Question

apter 7 Homework Saved He Boulder, Inc., obtained 90 percent of Rock Corporation on January 1, 2016. Annual amortization of $22,000 is allocations of Rock's acquisition-date business fair value. On January 1, 2017, Rock acquired 75 percent of Stone Company's voting stock. Excess business fair-value amortization on this second acquisition amounted to $8,000 per year. For 2018, each of the three companies reported the following information accumulated by its separate accounting system. Separate operating income figures do not include any investment or dividend income ble on the 15 points Separate Operating Income Dividends Declared Boulder Rock Stone 245,000 85,000 150,000 $120,000 28,000 42,000 eBook Print a. What is consolidated net income for 2018? b. How is 2018 consolidated net income distributed to the controlling and noncontroiling interests? a. Consolidated net income Noncontrolling interest in consolidated net income

Explanation / Answer

Answer a. Boulder's Operating Income    245,000.00 Rock's Operating Income      85,000.00 Stone's Operating Income    150,000.00 Amortization Expense - Boulder's Investment in Rock    (22,000.00) Amortization Expense - Rock's Investment in Stone      (8,000.00) Consolidated Net Income    450,000.00 Answer b. Stone's Operating Income    150,000.00 Amortization Expense (on Rock's Investment)      (8,000.00) Stone's Accrual-based net Income    142,000.00 Noncontrolling Interest in Stone's Income - $142,000 X 25%    35,500.00 Rock's Operating Income      85,000.00 Amortization Expense (on Boulder's Investment)    (22,000.00) Equity Accrual from Ownership of Stone ($142,000 X 75%)    106,500.00 Rock's Accrual based net income    169,500.00 Noncontrolling Interest in Rock's Income - $169,500 X 10%    16,950.00 Total Net Income attributable to noncontrolling interests    52,450.00 Answer c. Boulders' Operating Income    245,000.00 Boulders' Share of Rock's Operating Income - $85,000 X 90%      76,500.00 Boulders' Share of Stone's Operating Income - $150,000 X 75% X 90%    101,250.00 Boulders' Share of Rock's excess amortization - $22,000 X 90%    (19,800.00) Boulders' Share of Stone's excess amortization - $8,000 X75% X 90%      (5,400.00) Controlling interest in Consolidated Net Income    397,550.00

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