Question

Seattle, Inc. owns an 80 percent interest in a Portuguese subsidiary. For 20X8, Seattle reported income from operations of $2.0 million. The Portuguese company's income from operations, after foreign currency translation, was $1.1 million. The foreign currency translation adjustment was $120,000 (credit). Consolidated net income and consolidated comprehensive income for the year are:
Consolidated Net Income Consolidated Comprehensive Income
(A) $ 3,100,000 $ 3,196,000
(B) $ 2,980,000 $ 3,076,000
(C) $ 3,004,000 $ 3,100,000
(D) $ 2,880,000 $ 2,976,000

Answer 1

Answer:

(D) $ 2,880,000 $ 2,976,000

Explanation:

Consoidated net income  

Seattle Inc                        $2,000,000

Portugese sub                $880,000

(1.1*80%)  

Consoidated net income $2,880,000

Comprehensive income  

Net income                                                 $2,880,000

Other comphrensive income/(loss)  

Foreign currency translation adjustment  $96,000

(120000*80%)  

combined comprehensive income           $2,976,000

Therefore, The Consolidated net income and consolidated comprehensive income for the year are $2,880,000 amd $2,976,000.