Page Corporation acquired a 60% interest in Ace Corporation at a price $40,000 in excess of book value and fair value on January 1,2013.On the same date,Ace acquired a 70% interest in Bader Corporation at a price $30,000 in excess of book value and fair value.The excess purchase cost paid by Page and Ace was attributed to goodwill.Separate net incomes (excluding investment income)for the three affiliates for 2013 are as follows: Page,$500,000,Ace,$300,000,and Bader,$400,000. Page's controlling interest share of consolidated net income for 2013 is
A)$808,000.
B)$848,000.
C)$920,000.
D)$960,000.

Question

Quizplus · Accepted Answer

Page's controlling interest share of consolidated net income includes its own net income, its share of Ace's net income (60%), and its share of Bader's net income through Ace (60% of Ace's 70% share). The goodwill from acquisitions does not affect the calculation of consolidated net income.Page's net income: $500,000Ace's net income attributable to Page (60% of $300,000): $180,000Bader's net income attributable to Page through Ace (60% of 70% of $400,000): $168,000Total = $500,000 + $180,000 + $168,000 = $848,000

Page Corporation Acquired a 60% Interest in Ace Corporation at a Price