Question

Required information On January 1, 2016, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc. for $495,000 cash. The acquisition date fair value of the noncontrolling interest was $55,000. At January 1, 2016, Star's net assets had a total carrying amount of $385.000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $69,600. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year emaining life), but not recorded on its books. Star recorded net income of $60,900 in 2016 and $69,600 in 2017. Each year since the acquisition, Star has declared a $17.400 dividend. At January 1, 2018, Pride's retained earnings show a $217,500 balance Selected account balances for the two companies from their separate operations were as follows: Pride 2018 Revenues $433,400 2018 Expenses 304,680 Star $248,000 169,700 What is consolidated net income for 2018?

Answer 1

Answer" consolidated net income for 2018 pride star Adj cosol. 433,404 481 ODD 68.1, Yoo 2018 Reytinues 50500 2018 Expenses ( Total 304,600 198,800 169,700 78,300 404.300 207,100 fair value of beviness, adjusted - Fv por non controlling + additional paid u overru = (55,000|64)+(4953000) (500) 104-) = 550,000 +695,000)-(495,000) = 550,000 En cey over book value = 550,000 – 385,000 . = 165,000 consolidated adjustments = [69,600|) +(165:00- 69,600)/4) = 87.00+ 23,850 ; - 32550

si consolidated net income for 2013 - $ 267,100 The amount of me laimed savingi : The amount of rtained Earning = $ 214,500] ==> Referined Earning balance will remain same, only assets and letilities are consolidated. It is standardized,