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On January 1, 2023, Harrison, Incorporated, acquired 90 percent of Starr Company in exchange for $1,126,000 fair-value consideration. The total fair value of Starr Company
| On January 1, 2023, Harrison, Incorporated, acquired 90 percent of Starr Company in exchange for $1,126,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,500. Harrison computed annual excess fair-value amortization of $8,100 based on the difference between Starrs total fair value and its underlying book value. The subsidiary reported net income of $71,500 in 2023 and $90,500 in 2024 with dividend declarations of $31,000 each year. Apart from its investment in Starr, Harrison had net income of $225,000 in 2023 and $264,000 in 2024. | ||
| Acquired percentage | 90% | |
| Fair value | $1,126,000 | |
| Total fair value | $1,200,500 | |
| Acquisition-date excess fair value amortization | $8,100 | |
| Starr Net income in 2023 | $71,500 | |
| Starr Net income in 2024 | $90,500 | |
| Dividend declaration | $31,000 | |
| Harrison Net income in 2023 | $225,000 | |
| Harrison Net income in 2024 | $264,000 | |
| Required: | ||
| Note: Use the cells A2 to B12 from the above information to complete this question. Formulas for any items to be subtracted must return negative values. | ||
| Prepare a schedule that calculates consolidated net income in 2023 and 2024. | ||
| Items | 2023 | 2024 |
| Harrison net income | ||
| Starr net income | ||
| Acquisition-date excess fair value amortization | ||
| Consolidated net income |
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