View the step-by-step solution to:

On January 1, 2013, Slaughter sold equipment to Bennett (a wholly owned subsidiary) for $120,000 in cash.

On January 1, 2013, Slaughter sold equipment to Bennett (a wholly owned subsidiary) for $120,000 in cash. The equipment had originally cost $100,000 but had a book value of only $70,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method.

Slaughter earned $220,000 in net income in 2013 (not including any investment income) while Bennett reported $90,000. Slaughter attributed any excess acquisition-date fair value to Bennett’s unpatented technology, which was amortized at a rate of $8,000 per year.
a. What is the consolidated net income for 2013?
b. What is the parent’s share of consolidated net income for 2013 if Slaughter owns only 90 percent of Bennett?
c. What is the parent’s share of consolidated net income for 2013 if Slaughter owns only 90 percent of Bennett and the equipment transfer was upstream?

Sign up to view the entire interaction

Top Answer

Dear Student Please find... View the full answer

Accounting-8368944.doc

On January 1, 2013, Slaughter sold equipment to Bennett (a wholly owned subsidiary) for $120,000 in cash. The equipment had originally cost $100,000 but had a book value of only $70,000 when...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online