On January 1,2023, Otter Company acquired 70 percent of Jumbo Company for $560,000 when Jumbo's...

90.2K

Verified Solution

Question

Accounting

On January 1,2023, Otter Company acquired 70 percent of Jumbo Company for $560,000 when Jumbo's book value was
$600,000. The fair value of the newly comprised 30 percent noncontrolling interest was assessed at $240,000. At the acquisition
date, Jumbo's trademark (10-year remaining life) was undervalued in its financial records by $50,000. Also, patented technology (5-
year remaining life) was undervalued by $150,000.
In 2024, Otter reports revenues of $840,000 and expenses of $320,000 from its separate operations. Jumbo reports revenues of
$210,000 and expenses of $95,000. What is the 2022 consolidated net income before allocation to the controlling and
noncontrolling interest?
$600,000.
$625,000.
$610,000.
$615,000.
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students