Question

Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2014. During 2014, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of excess cost allocations totaled $60,000 in 2014. What is the effect of including Harbor in consolidated net income for 2014

Answer 1

$440,000

Step-by-step explanation:

Calculation to determine the effect of including Harbor in consolidated net income for 2014

Using this formula

Effect of including Harbor in consolidated net income for 2014=Revenues-Expenses-Excess cost allocations

Let plug in the formula

Effect of including Harbor in consolidated net income for 2014=$2,500,000-$2,000,000-$60,000

Effect of including Harbor in consolidated net income for 2014=$440,000

Therefore Effect of including Harbor in consolidated net income for 2014 will be $440,000