Archie Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2016, the company reports net income of $20,000 in its separate financial statements. Increase in fair value of investment $12,000 Share in net income of subsidiary $4,000 Cash dividends paid by subsidiary and received by the company $3,500 Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Archie Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2016, the company reports net income of $20,000 in its separate financial statements. Increase in fair value of investment $12,000 Share in net income of subsidiary $4,000 Cash dividends paid by subsidiary and received by the company $3,500 Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Archie Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2016, the company reports net income of $20,000 in its separate financial statements.
| Increase in fair value of investment | $12,000 |
| Share in net income of subsidiary | $4,000 |
| Cash dividends paid by subsidiary and received by the company | $3,500 |
Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education