Page Corporation acquired a 60% interest in Ace Corporation at a price $40,000 in excess of book value and fair value on January 1,2010.On the same date,Ace acquired a 70% interest in Bader Corporation at a price $30,000 in excess of book value and fair value.The excess purchase cost paid by Page and Ace was attributed to goodwill.Separate net incomes (excluding investment income)for the three affiliates for 2010 are as follows: Page,$500,000,Ace,$300,000,and Bader,$400,000. Page's controlling interest share of consolidated net income for 2010 is

Question

Quizplus · Accepted Answer

To calculate the controlling interest share of consolidated net income, we need to first consolidate the financial statements of Ace and Bader into Page's financial statements.

Consolidated net income = Page's net income + (Ace's net income * Ace's non-controlling interest percentage) + (Bader's net income * Bader's non-controlling interest percentage)

- Ace's non-controlling interest percentage = 40% (100% - 60%)
- Bader's non-controlling interest percentage = 30% (100% - 70%)

Consolidated net income = 500,000 + (300,000 * 0.4) + (400,000 * 0.3) = $848,000

Therefore, the controlling interest share of consolidated net income for Page is $848,000. The correct answer is B.

Page Corporation Acquired a 60% Interest in Ace Corporation at a Price