McLaughlin,Inc.acquires 70 percent of Ellis Corporation on September 1,2019,and an additional 10 percent on November 1,2020.Annual amortization of $12,000 relates to the first acquisition.Ellis reports the following figures for 2020:
$\begin{array}{lr}
\text { Revenues } & \$ 500,000 \
\text { Expenses } & 350,000 \
\text { Retained earnings, 1/1/20 } & 3,500,000 \
\text { Dividends paid } & 40,000 \
\text { Common stock } & 400,000
\end{array}$
Without regard for this investment,McLaughlin earns $480,000 in net income ($840,000 revenues less $360,000 expenses;incurred evenly through the year)during 2020.
Required: Prepare a schedule of consolidated net income and apportionment to noncontrolling and controlling interests for 2020.

Question

McLaughlin,Inc.acquires 70 percent of Ellis Corporation on September 1,2019,and an additional 10 percent on November 1,2020.Annual amortization of $12,000 relates to the first acquisition.Ellis reports the following figures for 2020:
 $\begin{array}{lr}
\text { Revenues } & \$ 500,000 \
\text { Expenses } & 350,000 \
\text { Retained earnings, 1/1/20 } & 3,500,000 \
\text { Dividends paid } & 40,000 \
\text { Common stock } & 400,000
\end{array}$  
Without regard for this investment,McLaughlin earns $480,000 in net income ($840,000 revenues less $360,000 expenses;incurred evenly through the year)during 2020.
Required: Prepare a schedule of consolidated net income and apportionment to noncontrolling and controlling interests for 2020.

Quizplus · Accepted Answer

The Answer of McLaughlin,Inc.acquires 70 percent of Ellis Corporation on September 1,2019,and an additional 10 percent on November 1,2020.Annual amortization of $12,000 relates to the first acquisition.Ellis reports the following figures for 2020:
 $\begin{array}{lr}
\text { Revenues } & \$ 500,000 \
\text { Expenses } & 350,000 \
\text { Retained earnings, 1/1/20 } & 3,500,000 \
\text { Dividends paid } & 40,000 \
\text { Common stock } & 400,000
\end{array}$  
Without regard for this investment,McLaughlin earns $480,000 in net income ($840,000 revenues less $360,000 expenses;incurred evenly through the year)during 2020.
Required: Prepare a schedule of consolidated net income and apportionment to noncontrolling and controlling interests for 2020.

McLaughlin,Inc Without Regard for This Investment,McLaughlin Earns $480,000 in Net Income