Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values.  Based upon the following information, what is consolidated net income? Phelps internally generated income: $250,000 Shore internally generated income: $  50,000 Intercompany profit on Shore beginning inventory: $  10,000 Intercompany profit on Shore ending inventory: $  15,000   a. $300,000 b. $295,000 c. $286,000 d. $305,000

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values.  Based upon the following information, what is consolidated net income?

Phelps internally generated income:

$250,000

Shore internally generated income:

$  50,000

Intercompany profit on Shore beginning inventory:

$  10,000

Intercompany profit on Shore ending inventory:

$  15,000

 

a.

$300,000

b.

$295,000

c.

$286,000

d.

$305,000

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