Question

Big Co owns 80% of Little Co. Little Co. has the following trial balance expressed in Euros and in dollars (after remeasurement): Euros 10,000 20,000 Dollars 13,000 25,000 250,000 300,000 65,000 Account Cash Inventory Other assets Liabilities Common Stock Retained earnings Sales Expenses Dividends declared 50,000 60,000 100,000 114,000 300,000 200,000 333,000 222,000 20,000 24,000 What is Little's dollar-denominated income on the consolidation worksheet? (answer format: "XX,Xxx")

Answer 1

Calaculation of Little's Dollar denominated income on the conslidation :

Net income of little co. = Sales - expenses = $333000 - $222000 = $111000

given that , big co owns 80% of Little co.

Therefore

Income on consolidation = 80% of net income = $111000 × 80% = $88,800.

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