Question

Jazz Corporation receives management consulting services from its 90 percent owned subsidiary, Laker Inc. During 20X7, Jazz paid Laker $70,000 for its services. Laker's labor cost and other associated costs for the employees providing services to Jazz totaled $30,000 in 20X7. Jazz reported $330,000 of income from its own separate operations for 20X7, and Laker reported net income of $85,000. Based on the preceding information, what amount of income should be reported as consolidated income on the 20X7 Consolidated Financial Statements

Answer 1

Answer:

the amount of income that should be reported is $415,000

Explanation:

The computation of the amount of income that should be reported is shown below:

= Jazz separate operations income + laker net income

= $330,000 + $85,000

= $415,000

hence, the amount of income that should be reported is $415,000

Simply used the above formula to determine the consolidated income