Consolidated Net Income Computation
Verry Corporation owns 75 percent of Spawn Corporation’s voting common stock. Verry reported income from its separate operations of $90,000 and $110,000 in 20X4 and 20X5, respectively. Spawn reported net income of $60,000 and $40,000 in 20X4 and 20X5, respectively.
Required
a.Compute consolidated net income and the income assigned to the controlling interest for 20X4 and 20X5 if Verry sold land with a book value of $95,000 to Spawn for $120,000 on June 30, 20X4.
b.Compute consolidated net income and the amount of income assigned to the controlling interest in the consolidated statements for 20X4 and 20X5 if Spawn sold land with a book value of $95,000 to Verry for $120,000 on June 30, 20X4.
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