Gardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: Separate company net income before investment income Dividend income from investment in subsidiary Deferral of intra-entity gains Amortization expense related to excess fair value over book value of investment Lockhart Canning Co. Co. Gardner Corp. $900,000 $650,000 $150,000 250,000 120,000 110,000 80,000 40,000 20,000 25,000 Separate company net income includes Intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary.

Gardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: Separate company net income before investment income Dividend income from investment in subsidiary Deferral of intra-entity gains Amortization expense related to excess fair value over book value of investment Lockhart Canning Co. Co. Gardner Corp. $900,000 $650,000 $150,000 250,000 120,000 110,000 80,000 40,000 20,000 25,000 Separate company net income includes Intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary.

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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REQUIRED: Determine the percentage owned by the parent
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