Pablo Corporation acquired 60% of Abagia Corporation on January 1,2013,at a cost of $20,000 in excess of book value.Also,on July 1,2013,Pablo acquired 60% of Babin Corporation at book value.On January 1,2014,Abagia acquired a 20% interest in Babin at a cost of $10,000 in excess of book value.The excess purchase costs paid by Pablo and Abagia were attributed to goodwill. On July 1,2014,Pablo sold land with a book value of $20,000 to Abagia for $40,000.The $20,000 unrealized gain is included in Pablo's separate income.Separate net incomes for the affiliated companies (excluding investment income)for 2014 are:
$$\begin{array} { l l }
\text { Pablo } & \$ 250,000 \
\text { Abagia } & 70,000 \
\text {Babin } & 100,000
\end{array}$$ Controlling interest share of consolidated net income for 2014 is

Question

Pablo Corporation acquired 60% of Abagia Corporation on January 1,2013,at a cost of $20,000 in excess of book value.Also,on July 1,2013,Pablo acquired 60% of Babin Corporation at book value.On January 1,2014,Abagia acquired a 20% interest in Babin at a cost of $10,000 in excess of book value.The excess purchase costs paid by Pablo and Abagia were attributed to goodwill. On July 1,2014,Pablo sold land with a book value of $20,000 to Abagia for $40,000.The $20,000 unrealized gain is included in Pablo's separate income.Separate net incomes for the affiliated companies (excluding investment income)for 2014 are:
$$\begin{array} { l l } 
\text { Pablo } & \$ 250,000 \
\text { Abagia } & 70,000 \
\text {Babin } & 100,000
\end{array}$$ Controlling interest share of consolidated net income for 2014 is

Quizplus · Accepted Answer

The controlling interest share of consolidated net income is calculated by adding Pablo's net income, Abagia's net income (60% of $70,000), Babin's net income (60% of $100,000), and subtracting the unrealized gain on the land sale ($20,000). This results in $250,000 + $42,000 + $60,000 - $20,000 = $332,000. However, the correct choice is $344,000, which suggests an error in the calculation or assumptions.

Pablo Corporation Acquired 60% of Abagia Corporation on January 1,2013,at Pablo $250,000 Abagia 70,000Babin 100,000\begin{array} { l l } \text { Pablo } & \$ 250,000 \\\text { Abagia } & 70,000 \\\text {Babin } & 100,000\end{array} Pablo Abagia Babin ​$250,00070,000100,000​

Pablo Corporation Acquired 60% of Abagia Corporation on January 1,2013,at $\begin{array} { l l } \text { Pablo } & \$ 250,000 \\\text { Abagia } & 70,000 \\\text {Babin } & 100,000\end{array}$