Paco Corporation owns 90% of Aber Corporation,Aber Corporation owns 85% of Back Corporation,and Back Corporation owns 5% of Aber Corporation.The separate net incomes (excluding investment income)of Paco,Aber,and Back are $100,000,$40,000,and $55,000,respectively.Assume the investments were acquired at a cost equal to the book value of each investment,which also equals the fair value.
Required:
1.Calculate revised net incomes for Paco,Aber,and Back by using the conventional method.
2.Determine the controlling interest share of consolidated net income and the noncontrolling interest shares.

Question

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The Answer of Paco Corporation owns 90% of Aber Corporation,Aber Corporation owns 85% of Back Corporation,and Back Corporation owns 5% of Aber Corporation.The separate net incomes (excluding investment income)of Paco,Aber,and Back are $100,000,$40,000,and $55,000,respectively.Assume the investments were acquired at a cost equal to the book value of each investment,which also equals the fair value.
Required:
1.Calculate revised net incomes for Paco,Aber,and Back by using the conventional method.
2.Determine the controlling interest share of consolidated net income and the noncontrolling interest shares.

Paco Corporation Owns 90% of Aber Corporation,Aber Corporation Owns 85