On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $150,000 in cash. The equipment had originally cost $135,000 but had a book value of only $82,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $510,000 in net income in 2018 (not including any investment income) while Brannigan reported $167,300. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $6,100 per year. a. What is consolidated net income for 2018? b. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan? c. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was unstream?

On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $150,000 in cash. The equipment had originally cost $135,000 but had a book value of only $82,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $510,000 in net income in 2018 (not including any investment income) while Brannigan reported $167,300. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $6,100 per year. a. What is consolidated net income for 2018? b. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan? c. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was unstream?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $150,000 in cash. The equipment had
originally cost $135,000 but had a book value of only $82,500 when transferred. On that date, the equipment had a five-year
remaining life. Depreciation expense is computed using the straight-line method.
Ackerman reported $510,000 in net income in 2018 (not including any investment income) while Brannigan reported $167,300.
Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of
$6,100 per year.
a. What is consolidated net income for 2018?
b. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan?
c. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment
transfer was upstream?
d. What is the consolidated net income for 2019 if Ackerman reports $530,000 (does not include investment income) and Brannigan
$179,400 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.
Amounts
a. Consolidated net income
b. Consolidated net income to parent company
c. Consolidated net income to parent company
d. Consolidated net income

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