Paglia Corporation owns 80% of Aburn Corporation and has separate net income of $200,000 for 2013. Aburn Corporation has separate net income of $100,000 and owns 70% of the outstanding stock of Badley Corporation
Badley Corporation has separate net income of $80,000. (Separate net incomes exclude investment income.) The cost of each investment was equal to book value and fair value. The controlling interest share of consolidated net income for 2013 is
A) $324,800.
B) $328,800.
C) $344,800.
D) $348,800.
A) Paglia Aburn Badley
Separate incomes $200,000 $100,000 $80,000
Allocate Badley's income:
70% to Aburn _______ 56,000 (56,000)
Subtotal $200,000 $156,000 $24,000
Allocate Aburn's income:
80% to Paglia 124,800 (124,800) _______
Controlling interest share
of consolidated net income $324,800
Noncontrolling interest share $31,200 $24,000
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