Question
On January 1, 2015, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $140,000 in cash. The equipment had originally cost $120,000 but had
On January 1, 2015, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $140,000 in cash. The equipment had originally cost $120,000 but had a book value of only $80,000 when transferred. On that date, the equipment had a five year remaining life. Deprication expense is computed using the straight-line method.
Ackerman earned $240,000 in net income in 2015 (not including any investment income) while Brannigan reported $92,000. Ackerman attributed any excess acquisition-gate fair vllue to Brannigan's uppatented technology, which was amorited at a rate of $5,000 per year.
a. What is the consolidated net income for 2015?
Consolidated net income
b. What is the parent's share of consolidated net income for 2015 if Ackerman owns 90 percent of Brannigan?
Consolidated net income to parent company
c. What is the parent's share of consolidated net income for 2015 if Ackerman owns only 90 person of brannigan and the equipment transfer was upstream?
Conolidated net income to parent company
d. What is the consliidated net income for 2016 if Ackerman reports $260,000 (does not include investment income) and Brannigan $102,000 in income? Assume that Brannigan is a wholly owned subsidairy and the equipment transfer was downstream.
Consolidated net income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started