On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Incorporated, for $459,000 cash. The acquisition - date fair value of the noncontrolling interest was $51,000. At January1, 2022, Star's net assets had a total carrying amount of $356,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $63, 200. Any remaining excess fair value over book value wasattributed to unpatented technology developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $55,300 in 2022 and $63,200 in 2023. Each year since the acquisition, Star hasdeclared a $15,800 dividend. At January 1, 2024, Pride's retained earnings show a $197,500 balance. Selected account balances for the two companies from their separate operations were as follows: Items Pride Star 2024Revenues $393,500 $225,200 2024 Expenses 276, 600 154, 100 1. What is consolidated net income for 2024? 2. Assuming that Pride, in its internal records, accounts for its investment in Star using the equity method, whatamount of retained earnings would Pride report on its January 1, 2024, consolidated balance sheet?

Consolidated net income:Net income is a business's income after taxes, deductions, and other…

On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Incorporated, for $459,000 cash. The acquisition- date fair value of the noncontrolling interest was $51,000. At January 1, 2022, Star's net assets had a total carrying amount of $356,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $63, 200. Any remaining excess fair value over book value was attributed to unpatented technology developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $55,300 in 2022 and S63,200 in 2023. Each year since the acquisition, Star has declared a $15,800 dividend. At January 1, 2024, Pride's retained earnings show a $197,500 balance. Selected account balances for the two companies from their separate operations were as follows: Items Pride Star 2024

On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Incorporated, for $459,000 cash. The acquisition- date fair value of the noncontrolling interest was $51,000. At January 1, 2022, Star's net assets had a total carrying amount of $356,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $63, 200. Any remaining excess fair value over book value was attributed to unpatented technology developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $55,300 in 2022 and S63,200 in 2023. Each year since the acquisition, Star has declared a $15,800 dividend. At January 1, 2024, Pride's retained earnings show a $197,500 balance. Selected account balances for the two companies from their separate operations were as follows: Items Pride Star 2024

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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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…
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