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Shtirlitz [24]
3 years ago
12

A Parent Company owns 100% of its Subsidiary. During 2018, the Parent company reports net income (by itself, without any investm

ent income from its Subsidiary) of $1,850,000 and the subsidiary reports net income of $700,000. The Parent had a bond payable outstanding on July 1, 2018, with a carrying value equal to $930,000. The Subsidiary acquired the bond on July 1, 2018 for $860,000. During 2018, the Parent reported interest expense (related to the bond) of $80,000 while the Subsidiary reported interest income (related to the bond) of $37,000.
What is consolidated net income for the year ended December 31, 2018?
Business
1 answer:
marusya05 [52]3 years ago
6 0

Answer:

$2,593,000

Explanation:

The computation of consolidated net income is shown below:-

cancellation of excess of Interest expenses over Income = Interest expense - Interest income

= $80,000 - $37,000

= $43,000

Consolidated net income = Parent company Income + Subsidiary Income + cancellation of excess of Interest expenses over Income

= $1,850,000 + $700,000 + $43,000

= $2,593,000

So, for computing the consolidated net income we simply applied the above formula.

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Explanation:

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2 years ago
Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. Th
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As we know that

Net present value = Present value of cash inflows - Initial investment

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Present value os $163,000

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6 0
3 years ago
At a specific point on the demand curve for backpacks, the elasticity of demand is calculated to be -0.5.a. At that point, we wo
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Answer:

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Price elasticity of demand is always negative for normal goods. This happens because of the law of demand, that demand falls with rise in price.

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Answer:

Answer for the question:

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