Asked by Gabby Thomas on Jul 22, 2024
Verified
Kurton Inc. owned 90% of Luvyn Corp.'s voting common stock. The consideration paid exceeded book value by $110,000. Of this amount, one half is attributable to a patent and is to be amortized over 5 years. Luvyn held 20% of Kurton's voting common stock, which cost $28,000 more than fair value. During the current year, Kurton reported separate net income of $224,000 as well as dividend income from Luvyn of $37,800. At the same time, Luvyn reported its separate net income of $70,000 as well as dividend income from Kurton of $19,600.Required:Prepare a schedule to show consolidated net income.
Patent
A legal right granted by a government authority to an inventor or their assignee, giving them exclusive rights to produce, use, or sell an invention for a certain period of time.
Consideration Paid
The total amount of money or its equivalent paid or delivered by one party to another in exchange for goods, services, or assets.
Voting Common Stock
A type of equity security that grants the holder the right to vote on corporate matters and receive dividends.
- Determine and expound upon the net earnings allocated to controlling interests and minority shareholders.
Verified Answer
SA
$55,000 ÷ 5 years = 11,000
Learning Objectives
- Determine and expound upon the net earnings allocated to controlling interests and minority shareholders.