Assume that on January 1, 2012, a parent company acquired a 70% interest in a subsidiary's voting common stock. On the date of acquisition, the fair value of the subsidiary's net assets equaled their reported book values except for machinery and equipment, which had a fair value of $460,000 and a reported. book value of $250,000. The machinery and equipment had a 5 year remaining useful life and no salvage value. The following are the highly summarized pre-consolidation income statements of the parent and subsidiary for the year ended December 31, 2013:

Assume that on January 1, 2012, a parent company acquired a 70% interest in a subsidiary's voting common stock. On the date of acquisition, the fair value of the subsidiary's net assets equaled their reported book values except for machinery and equipment, which had a fair value of $460,000 and a reported. book value of $250,000. The machinery and equipment had a 5 year remaining useful life and no salvage value. The following are the highly summarized pre-consolidation income statements of the parent and subsidiary for the year ended December 31, 2013:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

Consolidated net income and net income attributable to the
noncontrolling interest
Assume that on January 1, 2012, a parent company acquired a 70% interest in
a subsidiary's voting common stock. On the date of acquisition, the fair value
of the subsidiary's net assets equaled their reported book values except for
machinery and equipment, which had a fair value of $460,000 and a reported
book value of $250,000. The machinery and equipment had a 5 year
remaining useful life and no salvage value. The following are the highly
summarized pre-consolidation income statements of the parent and
subsidiary for the year ended December 31, 2013:
Income Statement Parent Subsidiary
Revenues
$2,160,000 $288,000
71,400
(1,440,000)
(144,000)
$791,400 $144,000
Equity income
Expenses
Net income
For the year ended December 31, 2013, what amounts will be reported for (1)
consolidated net income and (2) net income attributable to the
noncontrolling interest, respectively, in the parent's consolidated financial
statements?
O$816,400 and $30,600
O$822,000 and $30,600
O$822,000 and $43,200
$935,400 and $43,200

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