1. Pat Company acquired an 80 percent interest in Sal Company on January 1, 2011, for $400,000 in excess of book value and fair value. On January 1, 2014, Pat had $1,000,000 par, 8 percent bonds outstanding with $40,000 unamortized discount. On January 2, 2014, Sal purchased $400,000 par of Pat's bonds at par. The bonds mature on January 1, 2018, and pay interest on January 1 and July 1. Pat's separate income, not including investment income, for 2014 is $800,000, and Sal's reported net income is $500,000. Required: Determine the following: a. Controlling interest share of consolidated net income for Pat Corporation and Subsidiary for 2014 b. Noncontrolling interest share for 2014 2. Comparative income statements for Pim Corporation and its 100 percent-owned subsidiary, Sad Corporation, for the year ended December 31, 2019, are summarized as follows: Pim Sad Sales $1,000,000 $500,000 Income from Sad 226,000 Bond interest income (includes discount amortization) 22,000 Cost of sales (670,000) (200,000) Operating expenses (150,000) (100,000) Bond interest expense (50,000) Net income $ 356,000 $222,000 Pim purchased its interest in Sad at fair value equal to book value on January 1, 2011. On January 1, 2012, Pim sold $500,000 par of 10 percent, 10-year bonds to the public at par, and on January 2, 2019, Sad purchased $200,000 par of the bonds at 97. The companies use straight-line amortization. There are no other intercompany transactions between the affiliates. Required: Prepare a consolidated income statement for Pim Corporation and Subsidiary for the year ended December 31, 2019. $503,000. The bonds are due on January 1,2015, and pay interest on January 1 and July 1. Required: a. Determine the gain or loss on the constructive retirement of Son's bonds. Son reports net income of $14,000 for 2011. Determine Pat's income from Son. 1. Pat Company acquired an 80 percent interest in Sal Company on January 1, 2011, for $400,000 in excess of book value and fair value. On January 1, 2014, Pat had $1,000,000 par, 8 percent bonds outstanding with $40,000 unamortized discount. On January 2, 2014, Sal purchased $400,000 par of Pat's bonds at par. The bonds mature on January 1, 2018, and pay interest on January 1 and July 1. Pat's separate income, not including investment income, for 2014 is $800,000, and Sal's reported net income is $500,000. Required: Determine the following: a. Controlling interest share of consolidated net income for Pat Corporation and Subsidiary for 2014 b. Noncontrolling interest share for 2014 2. Comparative income statements for Pim Corporation and its 100 percent-owned subsidiary, Sad Corporation, for the year ended December 31, 2019, are summarized as follows: Pim Sad Sales $1,000,000 $500,000 Income from Sad 226,000 Bond interest income (includes discount amortization) 22,000 Cost of sales (670,000) (200,000) Operating expenses (150,000) (100,000) Bond interest expense (50,000) Net income $ 356,000 $222,000 Pim purchased its interest in Sad at fair value equal to book value on January 1, 2011. On January 1, 2012, Pim sold $500,000 par of 10 percent, 10-year bonds to the public at par, and on January 2, 2019, Sad purchased $200,000 par of the bonds at 97. The companies use straight-line amortization. There are no other intercompany transactions between the affiliates. Required: Prepare a consolidated income statement for Pim Corporation and Subsidiary for the year ended December 31, 2019. $503,000. The bonds are due on January 1,2015, and pay interest on January 1 and July 1. Required: a. Determine the gain or loss on the constructive retirement of Son's bonds. Son reports net income of $14,000 for 2011. Determine Pat's income from Son
