On January 1, 2010, XYZ Corp. acquired 90% of the voting common stock of ABC Corp. Amortization expense per year for patent technology resulted from the acquisition is $15,000. During 2019, ABC Corp. sold goods to XYZ for $400,000 which cost $300,000. XYZ still owned 30% of the goods at year-end. During the same year XYZ sold goods to ABC for $200,000 which cost $150,000. ABC still owned 25% of the goods at year-end. ABC reported net income was $115,000, and XYZ's net income from its own operation was $500,000. What was the consolidated net income for XYZ and ABC for year 2018?
On January 1, 2010, XYZ Corp. acquired 90% of the voting common stock of ABC Corp. Amortization expense per year for patent technology resulted from the acquisition is $15,000. During 2019, ABC Corp. sold goods to XYZ for $400,000 which cost $300,000. XYZ still owned 30% of the goods at year-end. During the same year XYZ sold goods to ABC for $200,000 which cost $150,000. ABC still owned 25% of the goods at year-end. ABC reported net income was $115,000, and XYZ's net income from its own operation was $500,000. What was the consolidated net income for XYZ and ABC for year 2018?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please explain it
Transcribed Image Text:On January 1, 2019, XYZ Corp. acquired 90% of the voting common stock of ABC Corp. Amortization
expense per year for patent technology resulted from the acquisition is $15,000.
During 2019, ABC Corp. sold goods to XYZ for $400,000 which cost $300,000. XYZ still owned 30%
of the goods at year-end. During the same year XYZ sold goods to ABC for $200,000 which cost
$150,000. ABC still owned 25% of the goods at year-end. ABC reported net income was $115,000,
and XYZ's net income from its own operation was $500,000. What was the consolidated net income
for XYZ and ABC for year 2018?
O a. $600,000
O b. $500,000
Oc. $557,500
O d. None of the answers is correct
O e. $550,500
Expert Solution
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 with 2 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education