E6-11 - BLKJ CH 6 Optional Homework Page 1 Exercise 6-11...

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Exercise 6-11 Note: depreciation expense: purchaser = ($270,000 / 12) = $22,500; consolidated = ($300,000 / 15) = $20,000 gain realized each year = differential depreciation = $20,000 - $22,500 = $2,500 credit (gain realized) Also note: there is no purchase differential to write-off or amortize since purchase price = book value (a) Baywatch’s separate net income $ 100,000 Tubberware’s net income realized ($40,000 + $2,500) 42,500 Consolidated net income $ 142,500 (b) Baywatch’s separate net income realized ($100,000 + $2,500) $102,500 Tubberware’s net income 40,000 Consolidated net income $142,500 Consolidated net income is the same although separate income realized differs
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This note was uploaded on 02/19/2011 for the course ACC 440 taught by Professor Henderson during the Spring '08 term at University of Phoenix.

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E6-11 - BLKJ CH 6 Optional Homework Page 1 Exercise 6-11...

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