4) Subsidiary purchases parent bonds Parent Company acquired an 80 percent interest in Sub Company on January 1, 2011, for $640,000 in excess of book value and fair value. On January 1, 2014, Parent had $1,600,000 par, 8 percent bonds outstanding with $64,000 unamortized discount. On January 2, 2014, Sub purchased $640,000 par of Pat's bonds at par. The bonds mature on January 1, 2018, and pay interest on January 1 and July 1. Parent's separate income, not including investment income, for 2014 is $1,280,000, and Sub's reported net income is $800,000. REQUIRED: Determine the following: a. Controlling interest share of consolidated net income for Parent Corporation and Subsidiary for 2014 b. Noncontrolling interest share for 2014
4) Subsidiary purchases parent bonds Parent Company acquired an 80 percent interest in Sub Company on January 1, 2011, for $640,000 in excess of book value and fair value. On January 1, 2014, Parent had $1,600,000 par, 8 percent bonds outstanding with $64,000 unamortized discount. On January 2, 2014, Sub purchased $640,000 par of Pat's bonds at par. The bonds mature on January 1, 2018, and pay interest on January 1 and July 1. Parent's separate income, not including investment income, for 2014 is $1,280,000, and Sub's reported net income is $800,000. REQUIRED: Determine the following: a. Controlling interest share of consolidated net income for Parent Corporation and Subsidiary for 2014 b. Noncontrolling interest share for 2014
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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m.1.
Transcribed Image Text:4) Subsidiary purchases parent bonds
Parent Company acquired an 80 percent interest in Sub Company on January 1, 2011, for $640,000 in excess of book
value and fair value. On January 1, 2014, Parent had $1,600,000 par, 8 percent bonds outstanding with $64,000
unamortized discount. On January 2, 2014, Sub purchased $640,000 par of Pat's bonds at par. The bonds mature on
January 1, 2018, and pay interest on January 1 and July 1.
Parent's separate income, not including investment income, for 2014 is $1,280,000, and Sub's reported net income
is $800,000.
REQUIRED: Determine the following:
a. Controlling interest share of consolidated net income for Parent Corporation and Subsidiary for 2014
b. Noncontrolling interest share for 2014
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