perch net income

Scenario: On January 1,2017, Perch Company purchased an 80% interest in the capital stock of Salmon Company for $3,400,000. At that time, Salmon Company had common stock of $2,200,000 and retained earnings of $620,000. Perch Company uses the cost method to record its investment in Salmon Company. Salmon Company identified that the following fair values in excess of book values as of the date of acquisition: Equipment 400,000, Land 200,000, and Inventory 80,000 . The book values of all other assets and liabilities of Salmon Company were equal to their fair values on January 1, 2017. The equipment had a remaining life of five years on January 1, 2017; the inventory was sold in 2017. Salmon Company's net income and dividends declared in 2017 were as follows: Year 2017 Net Income of $400,000; Dividends Declared of $100,000 In 2017 Salmon sold merchandise to Perch for $1,000,000.$350,000 worth of inventory was still on hand at the end ofthe year with an unrealized profit of $87,500. In 2018 Perch sold merchandise to Salmon for $300,000. $100,000 worth of inventory is still on hand at the end of the year with an unrealized profit of $40,000. Question: What is the amount of consolidated income (i.e., consolidated net income before deducting noncontrolling interest in net income)? $1,167,500$1,272,000$910,000$1,047,500 RETAINED EARNINGS 1/1 Retained Eamings: 1/1 RE-Parent 2,000,000 Scenario: On January 1,2017, Perch Company purchased an 80% interest in the capital stock of Salmon Company for $3,400,000. At that time, Salmon Company had common stock of $2,200,000 and retained earnings of $620,000. Perch Company uses the cost method to record its investment in Salmon Company. Salmon Company identified that the following fair values in excess of book values as of the date of acquisition: Equipment 400,000, Land 200,000, and Inventory 80,000 . The book values of all other assets and liabilities of Salmon Company were equal to their fair values on January 1, 2017. The equipment had a remaining life of five years on January 1, 2017; the inventory was sold in 2017. Salmon Company's net income and dividends declared in 2017 were as follows: Year 2017 Net Income of $400,000; Dividends Declared of $100,000 In 2017 Salmon sold merchandise to Perch for $1,000,000.$350,000 worth of inventory was still on hand at the end ofthe year with an unrealized profit of $87,500. In 2018 Perch sold merchandise to Salmon for $300,000. $100,000 worth of inventory is still on hand at the end of the year with an unrealized profit of $40,000. Question: What is the amount of consolidated income (i.e., consolidated net income before deducting noncontrolling interest in net income)? $1,167,500$1,272,000$910,000$1,047,500 RETAINED EARNINGS 1/1 Retained Eamings: 1/1 RE-Parent 2,000,000