On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc.,

Question:

On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $540,000 cash. The acquisition-date fair value of the noncontrolling interest was $60,000. At January 1, 2022, Star’s net assets had a total carrying amount of $420,000. Equipment (8-year remaining life) was undervalued on Star’s financial records by $80,000. Any remaining excess fair value over book value was attributed to unpatented technology developed by Star (4-year remaining life), but not recorded on its books. Star recorded net income of $70,000 in 2022 and $80,000 in 2023. Each year since the acquisition, Star has declared a $20,000 dividend. At January 1, 2024, Pride’s retained earnings show a $250,000 balance. Selected account balances for the two companies from their separWhat is consolidated net income for 2024?

a. $194,000

b. $197,500

c. $203,000

d. $238,000ate operations were as follows: