Question

At December 31, S Corp. owned 80% of J Corp.’s common stock and 90% of C Corp.’s common stock. J’s net income for the year was $200,000 and C’s net income was $400,000. C and J had no interentity ownership or transactions during the year. Combined financial statements are being prepared for C and J in contemplation of their sale to an outside party. In the combined income statement, combined net income should be reported at

Answer 1

Answer:

$600,000

Explanation:

Data provided in the question

Owning percentage = 80%

Owning percentage = 90%

J net income = $200,000

C net income = $400,000

So, the combined net income reported is

= J net income + C net income

= $200,000 + $400,000

= $600,000

For determining the combined net income we simply added the J net income and C net income so that the correct amount could come