Consolidated Statement of Earnings}

Laurier Ltd. is the wholly owned subsidiary of Stuart Corporation. The December 31, 2018, statement of earnings for the two corporations are as follows:

The acquisition cost of Stuart's \(100 \%\) ownership interest in Laurier equalled its book value on Laurier's records. During 2018, Laurier paid a cash dividend of \(\$ 25\) to Stuart.
\section*{Required:}
1. Calculate the income from investment in Laurier as reported on Stuart's statement of earnings.
2. Calculate the 2018 net income reported by the parent company (Stuart) on its statement of earnings.
3. Prepare the 2018 consolidated statement of earnings for Stuart.
\section*{Exercise

Transcribed Image Text:

Stuart Sales revenue Income from investment in Laurier Total revenue Cost of goods sold Depreciation expense Other expenses Net income Laurier $3,200 Sales revenue $500 ? ? Total revenue 500 $920 Cost of goods sold $160 410 Depreciation expense 95 680 2,010 Other expenses 135 390 $ ? Net income $110