Fisher Company acquired 80 percent of the outstanding shares of Gibbs Company for $152 in cash.(No goodwill was present at the time of acquisition.)The net income for the current year for Fisher Company is $100.The net income for the current year for Gibbs Company is $20.There were no intercompany sales.What is the net income on the consolidated income statement for the current year?

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of net income attributable to Fisher Company's ownership of Gibbs Company: 
($20 x 80%) = $16 
Then we add Fisher Company's stand-alone net income: $100 
Total consolidated net income = $16 + $100 = $116, which is option D.

Fisher Company Acquired 80 Percent of the Outstanding Shares of Gibbs