Question

Seattle, Inc. owns an 80 percent interest in a Portuguese subsidiary. For 20X8, Seattle reported income from operations of $2.0 million. The Portuguese company's income from operations, after foreign currency translation, was $1.1 million. The foreign currency translation adjustment was $120,000 (credit). Consolidated net income and consolidated comprehensive income for the year are:

Consolidated Net Income Consolidated Comprehensive Income
(A) $ 3,100,000 $ 3,196,000
(B) $ 2,980,000 $ 3,076,000
(C) $ 3,004,000 $ 3,100,000
(D) $ 2,880,000 $ 2,976,000

Answer 1

(D) $ 2,880,000 $ 2,976,000

Step-by-step explanation:

Consoidated net income

Seattle Inc $2,000,000

Portugese sub $880,000

(1.1*80%)

Consoidated net income $2,880,000

Comprehensive income

Net income $2,880,000

Other comphrensive income/(loss)

Foreign currency translation adjustment $96,000

(120000*80%)

combined comprehensive income $2,976,000

Therefore, The Consolidated net income and consolidated comprehensive income for the year are $2,880,000 amd $2,976,000.