Question

On January 1, 2017, Chamberlain Corporation pays $503,200 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $19,800 results from the acquisition. On December 31, 2018, Neville reports revenues of $460,000 and expenses of $328,000 and Chamberlain reports revenues of $784,000 and expenses of $440,000. The parent figures contain no income from the subsidiary. What is consolidated net income attributable to Chamberlain Corporation

Answer 1

Step-by-step explanation:

Calculation to determine consolidated net income attributable to Chamberlain Corporation

Using this formula

Consolidated net income attributable to Chamberlain Corporation=[(Neville Revenues-Neville Expenses)+(Chamberlain Revenues-Chamberlain Expenses)- Annual excess fair-value amortization]-[(Neville Revenues-Neville Expenses)-Annual excess fair-value amortization*percentage of ownership in Neville.

Let plug in the formula

Consolidated net income attributable to Chamberlain Corporation=[($460,000-$328,000)+($784,000-$440,000)-$19,800]-[($460,000-$328,000)-$19,800*40%]

Consolidated net income attributable to Chamberlain Corporation=($132,000+$344,000-$19,800)-($132,000-$7,920)