On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares 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
On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares 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
Chapter1: Financial Statements And Business Decisions
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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 $63,200 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
2024 Revenues $ 393,500
2024 Expenses 276,600
What is consolidated net Income for 2024?
Multiple Choice
$153,100
$152,045
$188,000
Star
$ 225, 200
154,100
$157,400
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