Question
On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $657,000 cash. The acquisition-date fair value of
On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $657,000 cash. The acquisition-date fair value of the noncontrolling interest was $73,000. At January 1, 2019, Stars net assets had a total carrying amount of $512,000. Equipment (eight-year remaining life) was undervalued on Stars financial records by $49,600. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $43,400 in 2019 and $49,600 in 2020. Each year since the acquisition, Star has declared a $12,400 dividend. At January 1, 2021, Prides retained earnings show a $155,000 balance.
Selected account balances for the two companies from their separate operations were as follows:
| Pride | Star | |||||
| 2021 Revenues | $ | 308,800 | $ | 176,700 | ||
| 2021 Expenses | 217,000 | 120,900 | ||||
What is consolidated net income for 2021?
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Finite Mathematics and Its Applications
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
12th edition
978-0134768632
