On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $240,000 in cash. The equipment had originally cost $216,000 but had a book value of only $132,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $340,000 in net income in 2021 (not including any investment income) while Brannigan reported $111,200. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,400 per year. a. What is consolidated net income for 2021? b. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? c. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? d. What is the consolidated net income for 2022 if Ackerman reports $360,000 (does not include investment income) and Brannigan $121,600 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream. Amounts
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $240,000 in cash. The equipment had originally cost $216,000 but had a book value of only $132,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $340,000 in net income in 2021 (not including any investment income) while Brannigan reported $111,200. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,400 per year. a. What is consolidated net income for 2021? b. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? c. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? d. What is the consolidated net income for 2022 if Ackerman reports $360,000 (does not include investment income) and Brannigan $121,600 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream. Amounts
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College