On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $657,000 cash. The acquisition-date fair value of the noncontrolling interest was $73,000. At January 1, 2019, Star's net assets had a total carrying amount of $512,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $49,600. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $43,400 in 2019 and $49,600 in 2020. Each year since the acquisition, Star has declared a $12,400 dividend. At January 1, 2021, Pride's retained earnings show a $155,000 balance. Selected account balances for the two companies from their separate operations were as follows: 2021 Revenues 2021 Expenses What is consolidated net income for 2021? Multiple Choice $147,600. $119,900. $99,300. Pride Star $ 308,800 $ 176,700 217,000 120,900 $116,920.

On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $657,000 cash. The acquisition-date fair value of the noncontrolling interest was $73,000. At January 1, 2019, Star's net assets had a total carrying amount of $512,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $49,600. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $43,400 in 2019 and $49,600 in 2020. Each year since the acquisition, Star has declared a $12,400 dividend. At January 1, 2021, Pride's retained earnings show a $155,000 balance. Selected account balances for the two companies from their separate operations were as follows: 2021 Revenues 2021 Expenses What is consolidated net income for 2021? Multiple Choice $147,600. $119,900. $99,300. Pride Star $ 308,800 $ 176,700 217,000 120,900 $116,920.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting
shares of Star, Inc., for $657,000 cash. The acquisition-date fair value of the
noncontrolling interest was $73,000. At January 1, 2019, Star's net assets had a total
carrying amount of $512,000. Equipment (eight-year remaining life) was undervalued on
Star's financial records by $49,600. Any remaining excess fair value over book value was
attributed to a customer list developed by Star (four-year remaining life), but not
recorded on its books. Star recorded net income of $43,400 in 2019 and $49,600 in
2020. Each year since the acquisition, Star has declared a $12,400 dividend. At January
1, 2021, Pride's retained earnings show a $155,000 balance.
Selected account balances for the two companies from their separate operations were
as follows:
Pride
2021 Revenues $ 308,800
2021 Expenses 217,000
What is consolidated net income for 2021?
Multiple Choice
$147,600.
O $119,900.
$99,300.
Star
$ 176,700
120,900
$116,920.

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