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Compute for the consolidated net income.

Compute for the consolidated net income.

FINANCIAL ACCOUNTING
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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Compute for the consolidated net income.

Separate income statements of Quail Corporation and its 80%-owned subsidiary, Savannah Corporation, for 2005 are as follows: Quail Savannah Sales Revenue $ $ 300,000 800,000 35,000 Gain on equipment Gain on land Cost of sales 400,000) 20,000 160,000) 60,000) 265,000) Other expenses Separate incomes $ 170,000 100,000 Additional information: 1. Quail acquired its 80% interest in Savannah Corporation when the book values were equal to the fair values. 2. The gain on equipment relates to equipment with a book value of $85,000 and a 7-year remaining useful life that Quail sold to Savannah for $120,000 on January 2, 2005. The straight-line depreciation method was used. 3. In 2005, Savannah sold land to an outside entity for $80,000. The land was acquired from Quail in 2003 for $60,000. The original cost of the land to Quail was $35,000. ( ( (
Transcribed Image Text:Separate income statements of Quail Corporation and its 80%-owned subsidiary, Savannah Corporation, for 2005 are as follows: Quail Savannah Sales Revenue $ $ 300,000 800,000 35,000 Gain on equipment Gain on land Cost of sales 400,000) 20,000 160,000) 60,000) 265,000) Other expenses Separate incomes $ 170,000 100,000 Additional information: 1. Quail acquired its 80% interest in Savannah Corporation when the book values were equal to the fair values. 2. The gain on equipment relates to equipment with a book value of $85,000 and a 7-year remaining useful life that Quail sold to Savannah for $120,000 on January 2, 2005. The straight-line depreciation method was used. 3. In 2005, Savannah sold land to an outside entity for $80,000. The land was acquired from Quail in 2003 for $60,000. The original cost of the land to Quail was $35,000. ( ( (
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