Dlamond Sapphire Emerald Separate operating income $348,000 $228,000 $210,000
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Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $50,000 intra-entity gain on transfers to Emerald still in Emerald’s possession.
What is Diamond’s accrual-based net income for the year?
a. $658,400
b. $674,400
c. $666,800
d. $645,600
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- Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Assets Cash Professor Scholar Corporation Corporation $50,300 Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Scholar Corporation Total Assets Liabilities & Equity Accounts payable Mortgage payable Common stock Retained earnings NCI in Net assets of Scholar Corporation Total Liabilities & Equity 90,000 130,000 60,000 410,000 (150,000) 102,200 $ 692,500 $152,500 250,000…Scott Company purchased 30% of the ownership of Earnest Enterprises on January 1, 20X2, at underlying book value. In 20X2 Earnest reported net income of $60,000 and paid dividends of $15,000 and in 20X3 reported a loss of $40,000 and paid dividends of $35,000. Scott uses the equity method in accounting for its investment in Earnest and reported a balance in its investment account of $135,000 on December 31, 20X3. Record the entries for 20X2 and 20X3At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $45 million. At the time of purchase, the carrying value of Sky Tech's net assets was $75 million. The fair value of Sky Tech's depreciable assets was $15 million in excess of their book value. For this year, Sky Tech reported a net income of $75 million and declared and paid $15 million in dividends.The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:
- Cheyenne Corporation purchased for $327,000 a 25% interest in Murphy, Inc. This investment enables Cheyenne to exert significant influence over Murphy. During the year, Murphy earned net income of $185,000 and paid dividends of $62,000. Prepare Cheyenne's journal entries related to this investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record the purchase.) (To record the net income.) (To record the dividend.) LPlaintain Company owns 100% of Syncopati Inc. The excess of acquisition cost over book value was attributed entirely to previously unrecorded identifiable intangibles. For 2021, Syncopati reported net income of $6,000,000 and declared and paid dividends of $1,500,000. Amortization of the previously unrecorded identifiable intangibles for 2021 is $1,200,000. The following information is available regarding intercompany transactions: 1. During 2021, Syncopati sold services to Plaintain for $1,000,000. Plaintain still owes Syncopati $100,000 for those services at year-end. 2. Plaintain's ending inventory at December 31, 2021, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $300,000. 3. Plaintain's ending inventory at December 31, 2020, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $400,000. 4. Syncopati's ending inventory at December 31, 2021, included merchandise acquired from Plaintain; the…Sandhill Corporation purchased for $288,000 a 25% interest in Murphy, Inc. This investment enables Sandhill to exert significant influence over Murphy. During the year, Murphy earned net income of $173,000 and paid dividends of $54,000. Prepare Sandhill's journal entries related to this investment. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
- Concord Corporation purchased for $288,000 a 25% interest in Murphy, Inc. This investment enables Concord to exert significant influence over Murphy. During the year, Murphy earned net income of $173,000 and paid dividends of $54,000. Prepare Concord's journal entries related to this investment. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record the purchase.) (To record the net income.) (To record the dividend.)Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually reported the following income (exclusive of any investment income): Lake Boxwood $ 329,000 110,000 Lake paid a $75,000 cash dividend during the current year, and Boxwood distributed $15,000. Boxwood sells inventory to Lake each period. Intra-entity gross profits of $20,400 were present in Lake's beginning inventory for the current year, and its ending inventory carried $35,900 in intra-entity gross profits. View each of the following questions as an independent situation. The effective tax rate for both companies is 21 percent. a. If Lake owns a 60 percent interest in Boxwood, what total income tax expense must be reported on a consolidated income statement for this period? (Round the intermediate calculations and final answers to the nearest dollar amount.) b. If Lake owns a 60 percent interest in Boxwood, what total amount of income taxes must be paid by…Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation. Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation $ 50,300 90,000 Scholar Corporation $21,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 $ 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and…
- Pronghorn Corporation purchased for $ 322,000 a 30% interest in Murphy, Inc. This investment enables Pronghorn to exert significant influence over Murphy. During the year, Murphy earned net income of $ 183,000 and paid dividends of $ 60,000.Prepare Pronghorn’s journal entries related to this investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record the purchase enter a debit amount enter a credit amount enter an account title to record the purchase enter a debit amount enter a credit amount (To record the purchase.) enter an account title to record the net income enter a debit amount enter a credit amount enter an account title to record the net income enter a debit amount enter a credit amount (To record the…Swifty Company reported net income of $481000 for the year ended 12/31/25. Included in the computation of net income were the following: depreciation expense, $59400; amortization of a patent, $32000; income from an investment in the common stock of Blue Inc., accounted for under the equity method, $ 48400; and amortization of bond discount, $12000. Swifty also paid an $81000 dividend during the year. The net cash provided by operating activities would be reported at (a) $455000 (b) 423000 (c)342000 (d ) 536000Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $310,500 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $345,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit $ 174,000 181,000 211,000 353,700 206,000 707,000 187,000 41,000 220,000 89.000 $2,369,700 Credit $450,000 63,000 188,000 492,000 313,900 789,000 73.800 $2,369,700 Snoopy Company Debit $ 87,000 82,000 76,000 95,000 188,000 120,000 9,000 27,000 34,000 $718,000 Credit $18,000 48,000 69,000 196,000 149,000 238,000 0 $718,000 Required: a. Prepare any equity…
