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

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....

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