Question

Bellbird Corporation acquired an 80% interest in Honey Inc for $130,000 on January 1, 2014, when Honey had Capital Stock of $125,000 and Retained Earnings of $25,000. Bellbird's separate income statement and a consolidated income statement for Bellbird Corporation and Subsidiary as of December 31, 2014, are shown below.
Bellbird Consolidated
Sales revenue $150,000 $235,750
Income from Corporal 12,600
Cost of sales (60,000) (100, 000)
Other expenses (20,000) (50,000)
Noncontrolling interest income ( (3,150)
Net income $81,600 $81,600
Honey's separate income statement must have reported net income of:__________________.

Answer 1

Answer:

$15,750

Explanation:

The computation of the net income reported by two methods is shown below:

= Income from Corporal + Non-controlling interest income

= $12,600 + $3,150

= $15,750

Or we can one thing also

= Income from Corporal ÷ acquiring percentage

= $12,600 ÷ 80%

= $15,750

All other information that is mentioned in the question is not relevant. Hence, ignored it