Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation's ownership in 20X5. At the dates the ownership was acquired, the fair value of the noncontrolling interest was equal to a proportionate share of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows: Year 20X7 20x7 Producer Beta Corporation Cole Corporation Production Cost $ 24,000 Buyer 60,000 Ajax Corporation Beta Corporation 20x8 20x8 Ajax Corporation 15,000 Beta Corporation Beta Corporation 20x8 Cole Corporation 63,000 27,000 Cole Corporation Ajax Corporation Transfer Price $ 30,000 Unsold at End of Year $ 10,000 Year Sold 20X8 72,000 18,000 20x8 35,000 7,000 20X9 72,000 12,000 20X9 45,000 15,000 20X9 For the year ended December 31, 20X8, Ajax reported $80,000 of income from its separate operations (excluding income from intercorporate investments), Beta reported net income of $37,500, and Cole reported net income of $20,000. Required: a. Compute the amount to be reported as consolidated net income for 20X8. Note: Do not round intermediate calculations. Consolidated net income

Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation's ownership in 20X5. At the dates the ownership was acquired, the fair value of the noncontrolling interest was equal to a proportionate share of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows: Year 20X7 20x7 Producer Beta Corporation Cole Corporation Production Cost $ 24,000 Buyer 60,000 Ajax Corporation Beta Corporation 20x8 20x8 Ajax Corporation 15,000 Beta Corporation Beta Corporation 20x8 Cole Corporation 63,000 27,000 Cole Corporation Ajax Corporation Transfer Price $ 30,000 Unsold at End of Year $ 10,000 Year Sold 20X8 72,000 18,000 20x8 35,000 7,000 20X9 72,000 12,000 20X9 45,000 15,000 20X9 For the year ended December 31, 20X8, Ajax reported $80,000 of income from its separate operations (excluding income from intercorporate investments), Beta reported net income of $37,500, and Cole reported net income of $20,000. Required: a. Compute the amount to be reported as consolidated net income for 20X8. Note: Do not round intermediate calculations. Consolidated net income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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