Question

On January 1, 2012, Chamberlain Corporation pays $388,000 for a 60 percent ownership in Neville. Annual excess fair-value amortization of 815,000 results from the acquisition. On December 31, 2013, Neville reports revenues of $400,000and expenses of $300,000 and Chamberlain reports revenues of $700,000 and expenses of $400,000. The parent figurescontain no income from the subsidiary. What is consofidated net income attributable to the controlling interest?a. $231,000.b. $351,000.c $366,000.d. $400,000.

Answer 1

b. $351,000

Step-by-step explanation:

Net income for Chamberlain Corporation = $700,000 - $400,000

= $300,000

Net income for Neville = $400,000 - $300,000 - $15000

= $85000

Chamberlain Corporation share of Neville net income = 85000*0.60

= $51000

The consolidated net income attributable to the controlling interest

= $300,000 + 51000

= $351000

Therefore, The consofidated net income attributable to the controlling interest is $351000.