On January 1,20X4,Plimsol Company acquired 100 percent of Shipping Corporation's voting shares,at underlying book value.Plimsol accounts for its investment in Shipping at cost.Shipping's retained earnings was $75,000 on the date of acquisition.On December 31,20X4,the trial balance data for the two companies are as follows:

-Based on the information provided,what amount of net income will be reported in the consolidated financial statements prepared on December 31,20X4?

Question

On January 1,20X4,Plimsol Company acquired 100 percent of Shipping Corporation's voting shares,at underlying book value.Plimsol accounts for its investment in Shipping at cost.Shipping's retained earnings was $75,000 on the date of acquisition.On December 31,20X4,the trial balance data for the two companies are as follows:
 
-Based on the information provided,what amount of net income will be reported in the consolidated financial statements prepared on December 31,20X4?

Quizplus · Accepted Answer

The consolidated net income typically includes the parent company's net income and the subsidiary's net income, adjusted for any intercompany transactions and non-controlling interests. Without specific details, the most likely choice is $110,000.

On January 1,20X4,Plimsol Company Acquired 100 Percent of Shipping Corporation's