Question

On January 1, 2020, Chamberlain Corporation pays $654,400 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $23,400 results from the acquisition. On December 31, 2021, Neville reports revenues of $554,000 and expenses of $380,000 and Chamberlain reports revenues of $805,000 and expenses of $462,000. The parent figures contain no income from the subsidiary. What is consolidated net income attributable to Chamberlain Corporation

Answer 1

Answer:

$433,360

Explanation:

Consolidated Revenue              $1,359,000  ($554,000 + $805,000)

Less: Consolidated Expenses   $842,000     ($380,000 + $462,000)

Net Income                                 $517,000

Less: AEF value amortization    $23,400

Consolidated Net Income          $493,600

Consolidated Net Income attributable to Chamberlain Corporation = [($554,000 - $380,000 - $23,400)*60%] + [$805,000 - $462,000] = $90,360 + $343,000 = $433,360