Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 2

West Company acquired 60 percent of Solar Company for $300,000 when Solar's book value was $400,000.The newly comprised 40 percent noncontrolling interest had an assessed fair value of $200,000.Also at the acquisition date, Solar had a trademark (with a 10-year life) that was undervalued in the financial records by $60,000.Also, patented technology (with a 5-year life) was undervalued by $40,000.Two years later, the following figures are reported by these two companies (stockholders' equity accounts have been omitted): What is the consolidated net income before allocation to the controlling and noncontrolling interests a.$400,000.
B)$486,000.
C)$491,600.
D)$500,000.