Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $300,000 in cash. The equipment had originally cost $270,000 but had a book value of only $165,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $400,000 in net income in 2021 (not including any investment income) while Brannigan reported $131,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $5,000 per year. 1. What is consolidated net income for 2021? 2. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? 3. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? 4. What is the consolidated net income for 2022 if Ackerman reports $420,000 (does not include investment income) and Brannigan $142,000 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.

On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $300,000 in cash. The equipment had originally cost $270,000 but had a book value of only $165,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $400,000 in net income in 2021 (not including any investment income) while Brannigan reported $131,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $5,000 per year. 1. What is consolidated net income for 2021? 2. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? 3. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? 4. What is the consolidated net income for 2022 if Ackerman reports $420,000 (does not include investment income) and Brannigan $142,000 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Do not use ai
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $300,000 in cash. The equipment had originally cost $270,000 but had a book value of only $165,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $400,000 in net income in 2021 (not including any investment income) while Brannigan reported $131,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $5,000 per year. 1. What is consolidated net income for 2021? 2. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? 3. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? 4. What is the consolidated net income for 2022 if Ackerman reports $420,000 (does not include investment income) and Brannigan $142,000 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.
Transcribed Image Text:On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $300,000 in cash. The equipment had originally cost $270,000 but had a book value of only $165,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $400,000 in net income in 2021 (not including any investment income) while Brannigan reported $131,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $5,000 per year. 1. What is consolidated net income for 2021? 2. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? 3. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? 4. What is the consolidated net income for 2022 if Ackerman reports $420,000 (does not include investment income) and Brannigan $142,000 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS