Artichoke Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2032, the company reports net income of $200,000 in its separate financial statements. Cash dividends paid by subsidiary and received by the company $35,000 Increase in fair value of investment $120,000 Share in net income of subsidiary $40,000 Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Artichoke Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2032, the company reports net income of $200,000 in its separate financial statements. Cash dividends paid by subsidiary and received by the company $35,000 Increase in fair value of investment $120,000 Share in net income of subsidiary $40,000 Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Artichoke Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2032, the company reports net income of $200,000 in its separate financial statements.
| Cash dividends paid by subsidiary and received by the company | $35,000 |
| Increase in fair value of investment | $120,000 |
| Share in net income of subsidiary | $40,000 |
Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
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