Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute Wilson's share of income from Simon for consolidation for 2019.
A) $118,825.
B) $115,000.
C) $117,000.
D) $119,000.
E) $118,800.

Question

Quizplus · Accepted Answer

To compute Wilson's share of income from Simon for consolidation, we need to first eliminate the intra-entity transaction of $25,000. This gives us a consolidated net income of $150,000 - $25,000 = $125,000. Wilson's share of this income is calculated as 60% of $125,000, which is $75,000. We then add Wilson's share of the intercompany profit of $42,000 (60% of $70,000) to get the final answer of $117,000 (Option C).

Assuming There Are No Excess Amortizations Associated with the Consolidation