Ackerman reported $540,000 in net income in 2018 (not including any investment income) while Brannigan reported $177,200. Ackerman attributed any
Ackerman reported $540,000 in net income in 2018 (not including any investment income) while Brannigan reported $177,200. Ackerman attributed any
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $120,000 in cash. The equipment had originally cost $108,000 but had a book value of only $66,000 when transferred. On that date, the equipment had a five-year remaining life.
Ackerman reported $540,000 in net income in 2018 (not including any investment income) while Brannigan reported $177,200. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $6,400 per year.
- What is consolidated net income for 2018?
- What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan?
- What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream?
- What is the consolidated net income for 2019 if Ackerman reports $560,000 (does not include investment income) and Brannigan $189,600 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.
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