anet Corporation holds 75 percent of Slider Corporation\'s voting common stock,
ID: 2337023 • Letter: A
Question
anet Corporation holds 75 percent of Slider Corporation's voting common stock, acquired at book value. The fair value of the noncontrolling interest at the date of acquisition was equal to 25 percent of the book value of Slider Corporation. On December 31, 20X8, Slider Corporation acquired 25 percent of Janet Corporation's stock. Slider records dividends received from Janet as nonoperating income. In 20X9, Janet reported operating income of $100,000 and paid dividends of $40,000. During the same year, Slider reported operating income of $75,000 and paid $20,000 in dividends.
1) Based on the information provided, what amount will be reported as consolidated net income for 20X9 under the treasury stock method?
a. $150,000
b. $100,000
c. $75,000
d. $175,000
2)Based on the information provided, what amount will be reported as income assigned to the controlling interest for 20X9 under the treasury stock method?
a. $18,750
b. $156,250
c. $175,000
d. $100,000
Explanation / Answer
1) d. $ 175,000
The consolidated net income will be $100,000 + $75,000 = $175,000
2) b. $ 156,250
$ 100,000 + ($ 75,000 x 75%)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.