P Company owns 75% of the outstanding stock of S Company. S Company owns 80% of outstanding common stock of T Company. For 2006, each company had $100,000 of earnings from its own separate operations, exclusive of earnings on its investment in affiliates and amortization of cost in excess of book value. For 2006, P Company and S Company had amortization of cost in excess of book value of $4,000 and $20,000, respectively.
Required:
Determine the consolidated net income for 2006 that accrues to the controlling interest.

Question

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The Answer of P Company owns 75% of the outstanding stock of S Company. S Company owns 80% of outstanding common stock of T Company. For 2006, each company had $100,000 of earnings from its own separate operations, exclusive of earnings on its investment in affiliates and amortization of cost in excess of book value. For 2006, P Company and S Company had amortization of cost in excess of book value of $4,000 and $20,000, respectively.
Required:
Determine the consolidated net income for 2006 that accrues to the controlling interest.

P Company Owns 75% of the Outstanding Stock of S