Question

Use the following information to answer questions 14-16

West Company acquired 60 percent of Solar Company for $304,500 when Solar’s book value was $404,500. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $203,000. Also at the acquisition date, Solar had a trademark (with a 20-year life) that was undervalued in the financial records by $63,000. Also, patented technology (with a 10-year life) was undervalued by $43,000. Two years later, the following figures are reported by these two companies (stockholders’ equity accounts have been omitted):

	West Company Book Value				Solar Company Book Value				Solar Company Fair Value
Current assets	$	623,000			$	303,000			$	323,000
Trademarks		263,000				203,000				283,000
Patented technology		413,000				153,000				153,000
Liabilities		(393,000	)			(123,000	)			(123,000	)
Revenues		(903,000	)			(403,000	)
Expenses		497,000				303,000
Investment income		Not given

Problem 4-14 (LO 4-2)

What is the consolidated net income before allocation to the controlling and noncontrolling interests?

Multiple Choice

• $506,000.

• $498,550.

• $406,000.

• $501,530.

Answer 1

Consoledated Net Sotution Income before allocation to the controlling and non controlling Interests 1306000 - 800000 Combined Revenue (903000 + 403000] combined Expenses [497000+ 303000] Trademark Amortization [ 63000/ 30 Yorus] patent Amortization ( 43000/10 you] Consoledated Net Income - 3150 4300 498550