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kompoz [17]
3 years ago
15

Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2014. During 2014, Harbor had revenues of $2,500

,000 and expenses of $2,000,000. The amortization of excess cost allocations totaled $60,000 in 2014. What is the effect of including Harbor in consolidated net income for 2014
Business
1 answer:
Umnica [9.8K]3 years ago
7 0

Answer:

$440,000

Explanation:

Calculation to determine the effect of including Harbor in consolidated net income for 2014

Using this formula

Effect of including Harbor in consolidated net income for 2014=Revenues-Expenses-Excess cost allocations

Let plug in the formula

Effect of including Harbor in consolidated net income for 2014=$2,500,000-$2,000,000-$60,000

Effect of including Harbor in consolidated net income for 2014=$440,000

Therefore Effect of including Harbor in consolidated net income for 2014 will be $440,000

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Explanation:

In this question we have to use the Present value function which is shown on the attachment below:

In the first case

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