Portia Ltd.acquired 80% of Siro Ltd.on December 31,20X0.At the date of acquisition,Siro's net assets totalled $15,000.Portia uses the cost method to record the acquisition.At December 31,20X1,the separate-entity financial statements showed the following:

During 20X1,Siro sold $7,000 of goods,with a gross margin of 40%,to Portia.At the end of 20X1,$3,000 of the goods were still in Portia's inventory.What portion of consolidated net income for 20X1 is attributable to Portia?

Question

Portia Ltd.acquired 80% of Siro Ltd.on December 31,20X0.At the date of acquisition,Siro's net assets totalled $15,000.Portia uses the cost method to record the acquisition.At December 31,20X1,the separate-entity financial statements showed the following:

During 20X1,Siro sold $7,000 of goods,with a gross margin of 40%,to Portia.At the end of 20X1,$3,000 of the goods were still in Portia's inventory.What portion of consolidated net income for 20X1 is attributable to Portia?

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The Answer of Portia Ltd.acquired 80% of Siro Ltd.on December 31,20X0.At the date of acquisition,Siro's net assets totalled $15,000.Portia uses the cost method to record the acquisition.At December 31,20X1,the separate-entity financial statements showed the following:

During 20X1,Siro sold $7,000 of goods,with a gross margin of 40%,to Portia.At the end of 20X1,$3,000 of the goods were still in Portia's inventory.What portion of consolidated net income for 20X1 is attributable to Portia?