Business, 07.11.2019 01:31 rhussein6452

On january 1, 2016, pride corporation purchased 90 percent of the outstanding voting shares of star, inc.,
for $540,000 cash. the acquisition-date fair value of the noncontrolling interest was $60,000. at january
1, 2016, star’s net assets had a total carrying amount of $420,000. equipment (eight-year remaining life)
was undervalued on star’s financial records by $80,000. any remaining excess fair value over book value
was attributed to a customer list developed by star (four-year remaining life), but not recorded on its books.
star recorded net income of $70,000 in 2016 and $80,000 in 2017. each year since the acquisition, star
has declared a $20,000 dividend. at january 1, 2018, pride’s retained earnings show a $250,000 balance.
selected account balances for the two companies from their separate operations were as follows:
pride star
2018 revenues. . . . . . . . . . . $498,000 $285,000
2018 expenses. . . . . . . . . . . ? 350,000 195,000
7. what is consolidated net income for 2018?
a. $194,000
b. $197,500
c. $203,000
d. $238,000

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On january 1, 2016, pride corporation purchased 90 percent of the outstanding voting shares of star,...

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