Question
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $210,000 in cash. The equipment had originally cost $189,000 but had
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $210,000 in cash. The equipment had originally cost $189,000 but had a book value of only $115,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method.
Ackerman reported $310,000 in net income in 2021 (not including any investment income) while Brannigan reported $101,300. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,100 per year.
- What is consolidated net income for 2021?
- What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan?
- What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream?
- What is the consolidated net income for 2022 if Ackerman reports $330,000 (does not include investment income) and Brannigan $111,400 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.
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