Ch7%20Solutions - Chapter 7 - Consolidated Financial...

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Unformatted text preview: Chapter 7 - Consolidated Financial Statements - Ownership Patterns And Income Taxes 7-1 7-1 CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS - OWNERSHIP PATTERNS AND INCOME TAXES 1. D Answers to Problems 2. B 3. D 4. C 5. C 6. C 7. A Damson's accrual-based income: Operational income ................................................................... $200,000 Defer unrealized gain ................................................................ (40,000 Damson's accrual-based income ....................................... $160,000 ) Crimson's accrual-based income: Operational income ................................................................... $200,000 Investment Income (90% of Damsons realized income) ....... Crimson's accrual-based income ....................................... $344,000 144,000 Chapter 7 - Consolidated Financial Statements - Ownership Patterns And Income Taxes 7-2 Bassett's accrual-based income: Operational income ................................................................... $300,000 Investment income (80% of Crimson's realized income) ....... Bassett's accrual-based income ........................................ $575,200 275,200 8. C Icede's accrual-based income: Operational income ................................................................... $220,000 Defer unrealized gain ................................................................ (60,000 Icede's accrual-based income ............................................ $160,000 ) Outside ownership .................................................................... Noncontrolling interest ....................................................... $32,000 20% Healthstone's accrual-based income: Operational income ................................................................... $300,000 Defer unrealized gain ................................................................ (30,000) Investment income (80% of Icede's accrual-based income) . Healthstone's accrual-based income ................................. $398,000 128,000 Outside ownership .................................................................... Noncontrolling interest ....................................................... $79,600 20% Total noncontrolling interest = ($32,000 + $79,600) = $111,600 9. D Juvyn's operational income .......................................................... $50,000 Dividend income ............................................................................. Juvyn's income ............................................................................... $64,000 14,000 Outside ownership ............................................................................
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Ch7%20Solutions - Chapter 7 - Consolidated Financial...

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