Compute for the consolidated net income.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...
Related questions
Question
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.
(
(
(](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51a4e07e-086c-427a-930b-424ca1fd4634%2F1034eb77-ba48-4132-8baa-dbe026d0c36a%2Fhcgzsqm_processed.png&w=3840&q=75)
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.
(
(
(
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
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
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College