Alford Knight Revenues. Cost of goods sold.... Depreciation and amortization. Other expenses... Gain on sale of equipment Equity in earnings of Knight. Net income.. $(500,000) 300,000 $(230,000) 10,000 20,000 (30,000) 20,000 --0- (36,200) $(206,200) $ (60,000)
Alford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2018:
Additional Information for 2018
• Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight.
• Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31 they are $9,000.
• Annual excess amortization expense resulting from the acquisition is $11,000.
• Knight paid dividends totaling $20,000.
• The noncontrolling interest’s share of the subsidiary’s income is $9,800.
• During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively.
Using either the direct or indirect method, compute net
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